Negotiating Lease Hold over ProvisionsA commercial lease agreement contains many contractual provisions, one of which is the holdover provision. This provision increases the tenant’s monthly base rent a specific amount in the event the tenant remains in the leased space but does not renew the lease for an additional period after the primary term of the lease has expired. It is common for holdover rent to be increased by 50 to 100 percent of the previous paid base rental amount.As a tenant, you want to negotiate this provision in two ways to protect your financial interests. First, a tenant should work to not have holdover start until 90 days past the lease expiration date. By doing so, a tenant can gain some “breathing room” in the event they need to relocate to a different location and an unexpected delay occurs due to no fault of their own. A tenant should also work to negotiate a decreased holdover penalty amount. For example, if the lease provides a 100 percent increase of the existing base rent, then a tenant should work to lower this increase. In many cases, a landlord will agree to a 25 percent increase, or to an amount lower than the stated lease amount. In this regard, any reduction improves the tenant position financially in the event the landlord enforces the holdover provision.Please contact Fred R. Sutton with any questions you may have regarding Negotiating Lease Hold over Options.