What is Renewal or Extension of a Lease?

• A. The continuation of a lease beyond the original term, including a new lease where the lessee continues to use the same property
• B. The termination of a lease before its term with a penalty
• C. The sale of leased property with a leaseback
• D. The assignment of lease to another party

Answer: (A)

Renewal or extension means you keep the lease alive beyond its original end date by either extending the term of the current lease or signing a new lease while the lessee continues to occupy the same property. The emphasis is on continuing occupancy under an extended or renewed agreement, often with updated terms such as rent or duration, but the same asset remains in use by the same tenant. This differs from terminating a lease early with a penalty, selling the property and leasing it back, or transferring the lease rights to another party through assignment, which change the end of the lease, ownership, or tenant identity rather than simply extending the existing occupancy.