A tenant right to extend the lease term, similar to a renewal option, but often used to describe shorter-duration extensions or options with pre-set rather than market-determined rent.
The distinction between "renewal" and "extension" options is largely semantic and varies by jurisdiction and custom. In practice, extension options often refer to shorter add-on periods (e.g., 1- or 2-year extensions) at a predetermined rent, while renewal options may involve a market rent reset for a full additional term (e.g., 5 years). Both require strict notice compliance. When abstracting a lease, document both the deadline to exercise and the rent that will apply during the extended period. Options that are personal to the original tenant and cannot be exercised by an assignee should be flagged as a risk in the abstract.
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