Legal Question in Real Estate Law in California

Re: Commercial rental renewals

You can put just about anything in a lease in terms of rent upon exiration - its sometimes referred to as a "hold-over rent" clause. Its generally used to encourage tenants to enter into a new lease before the old lease expires, but could serve to set the new rent much higher at the end of one year if the tenant holds over and you don't negotiate a different deal. Alternatively, during the term of the lease (read the lease you draft very carefully to know what the notice terms are) at 30 days prior to expiration, you can simply give the tenant notice that you are increasing the rent to whatever level you wish at that point. The notice is effective the first day after the expiration of the lease agreement, assuming the tenant does not sign a new lease and becomes a month-to-month tenant at expiration of the lease.

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