Commercial Lease Renewal Clauses and Notice Requirements

A specialty kitchenware retailer operating from a 2,400-square-foot storefront in New Westminster, British Columbia, faces a contractual deadline with significant consequences. The operator signed a 5-year commercial lease in September 2019, with the term set to expire on August 31, 2024. Buried in the renewal provisions, the lease requires written notice of intention to renew no fewer than 6 months before the expiry date—meaning the deadline falls on February 28, 2024.

The retailer discovered this timeline in mid-January 2024, leaving approximately 6 weeks to evaluate whether to exercise the renewal option at the stated rental rate of $4,200 per month, or to approach the landlord seeking modified terms. The renewal clause locks in a 3-year extension but includes a 4% annual escalation. Comparable retail space in the area now leases for $3,800 to $4,500 per month, creating uncertainty about whether the contractual rate represents an advantage or a burden.

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