Right of renewal exercised, rent review completed, lease continues for the next term.
What happens at this step
Toward the end of each term, the tenant decides whether to exercise the right of renewal. The lease specifies the notice period (typically three to six months). At renewal, a rent review is usually completed (CPI, market, or fixed). The new term then runs on the same lease, with the new rent.
What NZ Legal does
We diary the renewal notice deadline at the start of the matter. We serve the renewal notice on time. We negotiate the rent review and any market rent dispute. Where the parties cannot agree, we run the registered valuer or arbitration process specified in the lease.
What you do
Tell us six months out from term end whether you intend to renew. Decide on rent review approach (negotiate directly, appoint a registered valuer, etc.). Keep your business records ready in case the rent review involves market evidence.
Common pitfalls
- Missing the renewal notice deadline. The right is lost if not exercised in time.
- Allowing the rent review to drag. Lease often has a default mechanism that disadvantages whoever is slower.
- Treating a renewal as a fresh lease. The terms generally roll on, with rent the only key variable.
