Any lease which contains an option, will specify the time in which the tenant has to exercise the option. Retail leases place an obligation on the landlord to let the tenant know the date is coming up. Commercial leases do not. Whilst most lawyers advise their clients of this time frame, which is usually no more than 9 months and no less than 3 months before the expiry of the term, you should save the date in your diary.
What happens if you don’t exercise your option by the expiry date? One outcome is the landlord assumes you do not wish to stay in the premises and therefore actively seeks another tenant to take your space. This could significantly impact on your business – you may have built up a good client base in the area, people come to you because where you are positioned, you may have excellent street frontage and foot traffic has been a major part to your income. What do you need to do? Diarise this date!