Property Management
What is a 'lease renewal option' in a Delaware commercial lease?
AThe landlord's right to terminate the lease at any time with proper notice
BThe tenant's contractual right to extend the lease for an additional term at a predetermined rent or rent formula, exercisable by notice before the option deadline✓ Correct
CA government program requiring landlords to offer all tenants lease renewal
DThe automatic renewal of a lease if neither party gives notice to terminate
Explanation
A renewal option gives the tenant the right (but not the obligation) to extend the lease term at a pre-agreed rent or rent formula. The tenant must exercise the option by written notice within the specified period (e.
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Key Terms to Know
Option Contract
A contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.
Right of First RefusalA contractual right giving a party the opportunity to match any offer received before the owner can accept it from a third party.
Earnest MoneyA deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
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