Option right (tenancy law) for the extension of the tenancy relationship

Option contract – Tenant and landlord can contractually agree that after the expiration of the lease, there is the possibility to extend the agreed rental period for a certain time. Thus, it is sufficient if the landlord declares that he wants to continue the tenancy. If several tenants have signed the contract, the option is of course signed jointly. If the option period is longer than one year, it must be recorded in writing. Usually, such agreements are put in place three to four months prior to the expiration of the initial lease term. Once the tenant takes up the option to renew, the previous tenancy is automatically renewed. If there are certain conditions that the tenant or landlord would like to agree, such as rent increases or modernisation work or similar, this must be clearly agreed in advance.

Option law at a glance: Option to extend the lease

• The option contract is relevant if the tenant wishes to extend the lease agreement
• Three months before the end of the first lease, the option contract must be discussed
• If the lease is extended for more than one year, it must be in writing
• Extra conditions for the contract must be clarified promptly and clearly

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