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Option To Renew Tenancy Agreement Template for Nigeria

This document provides a legal framework for extending an existing tenancy agreement in Nigeria, granting the tenant the right to renew their lease under specified terms and conditions. It operates under Nigerian property law and must comply with both federal regulations and state-specific tenancy laws. The agreement outlines the mechanism for exercising the renewal option, including notice periods, conditions precedent, and terms that will apply during the renewal period. It includes essential provisions for rent determination, maintenance obligations, and procedural requirements specific to Nigerian legal requirements, incorporating necessary safeguards for both landlord and tenant interests.

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What is a Option To Renew Tenancy Agreement?

The Option To Renew Tenancy Agreement is a crucial document in Nigerian property law that provides tenants with the contractual right to extend their tenancy beyond the initial lease term. This document is typically used when both landlord and tenant wish to establish a framework for potential lease continuation, offering certainty to tenants while protecting landlords' interests. It must comply with various Nigerian legal requirements, including state-specific tenancy laws and the Rent Control and Recovery of Residential Premises Laws. The agreement specifies critical elements such as notice periods, renewal terms, rent determination methods, and conditions that must be met for the option to be valid. It's particularly important in commercial leases where tenants make significant investments in the property and need security of tenure, but it's also relevant for residential properties where long-term occupancy is anticipated.

What sections should be included in a Option To Renew Tenancy Agreement?

1. Parties: Identification of the Landlord and Tenant, including full legal names, addresses, and any registration details for corporate entities

2. Background: Brief recital of the existing tenancy agreement, its key terms, and the context for the renewal option

3. Definitions: Key terms used in the agreement, including 'Option Period', 'Renewal Term', 'Exercise Notice', and other relevant definitions

4. Grant of Option: The formal grant of the renewal option, specifying the number of renewal terms permitted

5. Exercise of Option: Procedure and requirements for exercising the option, including notice periods and format

6. Renewal Terms: Specific terms that will apply during the renewal period, including rent, duration, and any modifications to existing terms

7. Conditions Precedent: Conditions that must be met before the option can be exercised (e.g., no existing defaults)

8. Time of Essence: Clause establishing that all time requirements in the agreement are essential terms

9. Execution: Signature blocks for all parties and witnesses as required under Nigerian law

What sections are optional to include in a Option To Renew Tenancy Agreement?

1. Rent Review Mechanism: Used when the renewal includes specific rent review provisions different from the original agreement

2. Property Improvements: Include when there are specific provisions about improvements made by the tenant and their impact on renewal terms

3. Multiple Renewal Options: Required when granting more than one successive renewal option

4. Assignment and Subletting: Include when specific restrictions or permissions regarding assignment during the renewal term are needed

5. Break Clause: Optional provision allowing early termination during the renewal period

6. Guarantor Provisions: Required when the original lease has a guarantor whose obligations need to extend to the renewal period

What schedules should be included in a Option To Renew Tenancy Agreement?

1. Schedule 1 - Property Description: Detailed description of the premises including boundaries and any exclusive or shared areas

2. Schedule 2 - Existing Lease Terms: Summary of key terms from the existing lease that will continue during the renewal period

3. Schedule 3 - Rent Schedule: Detailed breakdown of rent payments, including any scheduled increases during the renewal term

4. Schedule 4 - Condition Report: Current condition of the property to be referenced at the time of renewal

5. Appendix A - Form of Exercise Notice: Template notice format for exercising the renewal option

6. Appendix B - Required Documents: List of documents required for option exercise (e.g., proof of insurance, tax clearance)

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

Nigeria

Publisher

Genie AI

Document Type

Option Agreement

Cost

Free to use

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