Read your lease first
Find three things before you talk to the landlord:
- Your renewal option. Many leases give you the right to extend at a set rent or at fair market rent, but only if you give written notice by a deadline, often 6 to 12 months before the lease ends. Miss it and the option is gone.
- Holdover terms. If you stay past the end without a new deal, many leases raise rent to 150% or 200% of the last rate.
- Restoration terms. What you must remove or repair when you leave affects what moving would really cost.
Your leverage as an existing tenant
A landlord who keeps you avoids months of empty space, a broker commission, free rent and a new build out for the next tenant. That is real money, and it is your leverage. It only works if the landlord believes you might leave, so look at other spaces and get proposals. Even if you plan to stay, a competing proposal tells you, and your landlord, what the market will give you.
What to ask for
A market rate, not a flat increase
Compare your proposed renewal rent with what similar spaces nearby are leasing for now. If the market has softened, your rent can go down, not just up.
Free rent
New tenants often get free rent. Ask for some on a renewal too, especially on a longer extension.
- More free rent for longer terms
A refresh allowance
Ask the landlord to pay for new paint, flooring or other updates, the same way they would give a new tenant an improvement allowance.
- Stated in $ per SF
Better terms
Use the renewal to fix problems in the old lease: cap CAM increases, add a new renewal option, limit or release the personal guaranty, or add expansion or early termination rights.
- Easier to change now than mid term
Blend and extend
If you are a few years from the end and rates have fallen, ask for a blend and extend: you add years to the lease now, and the landlord lowers your current rent to a blend of the old and new rates. Landlords agree because it locks in a tenant longer.
Timeline
| When | What to do |
|---|---|
| 18 months out | Review the lease, note the option deadline, decide on your space needs |
| 12 to 15 months out | Tour alternatives and get proposals |
| 9 to 12 months out | Send a renewal proposal or exercise the option before the deadline |
| 6 months out | Finalize the amendment, or sign elsewhere and plan the move |
If you might move, start even earlier. See when to start looking for new space.
Before you sign the renewal
- Did you give any required notice before the option deadline?
- Did you compare the renewal rent with current comparable leases?
- Did you ask for free rent and a refresh allowance?
- Did you fix the problems in your old lease?
- Is the personal guaranty limited or released for the new term?
- Has a Colorado real estate attorney reviewed the amendment?
This is general information, not legal advice. Have a Colorado real estate attorney review any lease amendment before you sign it.
Common follow up questions
Can my landlord raise the rent when I renew?
Yes, unless your lease sets the renewal rent. Many renewal options say fair market rent, which is negotiated or set by a process in the lease. Without an option, the landlord can propose any rate, and your leverage is your willingness to move.
Do I need a broker to renew my lease?
You do not have to have one, but a tenant representation broker knows current comparable deals and can run a competing search, which is your main leverage. In most Colorado deals the landlord pays the commission.
What happens if I miss my renewal option deadline?
Usually you lose the right to renew on the option's terms. You can still negotiate a renewal, but the landlord is no longer bound to the rate or terms in the option.
This page is general information, not lending, legal or tax advice. Programs, limits and terms change, and every situation is different. Talk with your lender, attorney and CPA before you decide.