What to Know About Perpetual Leases
Leasing agreements can be intimidating to some, no matter what standpoint they are being looked at from. At Sivia Law we know how important it is to make sure that you understand the terms of your lease, especially if you are a landlord.
A perpetual lease is one that contains a provision that allows a tenant to renew their lease at the end of every lease term. This means that if the terms are unfavorable for the landlord, they will continue to be as such, according to the lease.
So, if a tenant is being uncooperative to a landlord who wishes to raise rent or change some of the terms, it can feel like a landlord is trapped in the lease forever.
What Are Your Options?
It is best to try to avoid such leases that continue in perpetuity. Unless the lease specifies that both parties intend for the lease to continue forever. One example can be that a lease is providing renewal within a well timed notice from the tenant, so a court may rule that both of the parties are in agreement to one renewal - and not endless - at the end of every consecutive term.
However, where it is stated that a lease gives a tenant the ability to renew their lease for consecutive terms, without specifically saying how many terms or without stating that the lease is intended to possibly be renewable ad infinitum, a court may rule that the parties are only obligated to two renewals.
If you are unsure what terms your lease covers or need help with future leases, remember that Sivia Law is here to help with any concerns.
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