Property Management
What is a lease renewal vs. a lease extension in property management?
AThey are identical
BA renewal creates a new lease; an extension continues the existing lease under the same or modified terms✓ Correct
CExtensions are only for commercial leases
DRenewals automatically occur; extensions require negotiation
Explanation
A lease renewal creates a new lease agreement (often with updated terms) after the original lease expires. A lease extension continues the existing lease for an additional period, typically under the same terms with a simple addendum.
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Key Terms to Know
Purchase Agreement
A legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
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.
Option ContractA contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.
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