Question 1

What is an option to renew a lease in Florida?

Accepted Answer

An option to renew gives the tenant the right to extend the lease for an additional term at the end of the current term. Key elements: renewal period (the length of the renewal term; can be one or more renewal options), renewal rent (the rent during the renewal term; can be: at the current rate, at a specified increased rate, at fair market value, or based on CPI adjustment), exercise deadline (when the tenant must notify the landlord of the intent to renew; typically 6-12 months before the current term expires), and exercise procedure (written notice to the landlord).

Question 2

What happens if a Florida tenant misses the renewal deadline?

Accepted Answer

Missed deadline: Florida courts strictly enforce renewal option deadlines. If the tenant fails to exercise the option within the specified period: the option expires and the tenant loses the right to renew, the tenant may become a holdover tenant (subject to eviction or a month-to-month tenancy at the landlord’s discretion), and the tenant has no right to remain beyond the lease term. Some leases include: a grace period (a specified number of days after the deadline for late exercise), a landlord reminder provision (the landlord must remind the tenant of the deadline a specified number of days in advance), and these provisions should be negotiated at lease signing.

Question 3

How should renewal rent be determined in a Florida commercial lease?

Accepted Answer

Rent determination: fixed increase (the renewal rent is a specified percentage above the current rent; most predictable), CPI adjustment (the renewal rent is adjusted based on the Consumer Price Index), fair market value (the renewal rent is determined by: mutual agreement, third-party appraisal, or a process specified in the lease; most contentious), and cap and floor (a FMV determination with a minimum floor and maximum cap to protect both parties). Tenants should negotiate: a cap on the renewal rent increase, a right to cancel if the renewal rent exceeds a specified amount, and a clear process for resolving FMV disputes (such as binding arbitration by a qualified appraiser).

Option to Renew Lease

Option to Renew Lease in Florida

Key Elements

Missed Deadline

Rent Determination

Related Terms

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