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What are the standard clauses for a Lease Extension Agreement?

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Lease Extension Agreement in Kenya

A Lease Extension Agreement is a legal document that extends the term of an existing lease agreement. It is a contract between the landlord and the tenant, outlining the new terms and conditions of the lease for the extended period.

Introduction
Standard Clauses in a Lease Extension Agreement 2.1. Parties 2.2. Extension Period 2.3. Rent and Other Charges 2.4. Renewal Option 2.5. Notice of Termination 2.6. Default and Remedies 2.7. Governing Law and Jurisdiction 2.8. Entire Agreement 2.9. Severability 2.10. Waiver 2.11. Notices 2.12. Amendments 2.13. Binding Effect
Case Laws
Sample Lease Extension Agreement
Conclusion
TLDR

Introduction

In Kenya, lease extension agreements are governed by the Land Act, 2012, and the Land (Extension and Renewal of Leases) Rules, 2017. These regulations outline the process for extending leases and the requirements for a valid lease extension agreement.

Standard Clauses in a Lease Extension Agreement

A Lease Extension Agreement typically includes the following standard clauses:

2.1. Parties

This clause identifies the parties to the agreement, including the landlord and the tenant. It should clearly state their full names and addresses.

2.2. Extension Period

This clause specifies the duration of the lease extension. It should clearly state the start date and the end date of the extended lease term.

2.3. Rent and Other Charges

This clause outlines the rent and other charges payable by the tenant during the extended lease term. It should specify the amount of rent, the frequency of payment, and any other charges such as service charges, utilities, or property taxes.

2.4. Renewal Option

This clause may include an option for the tenant to renew the lease for a further period after the extended term expires. It should specify the terms and conditions for renewal, including the duration of the renewal period, the rent payable, and any other relevant details.

2.5. Notice of Termination

This clause outlines the notice period required for either party to terminate the lease agreement. It should specify the length of the notice period and the method of delivery of the notice.

2.6. Default and Remedies

This clause outlines the consequences of a breach of the lease agreement by either party. It should specify the remedies available to the non-defaulting party, such as termination of the lease, payment of damages, or other appropriate actions.

2.7. Governing Law and Jurisdiction

This clause specifies the law that governs the lease agreement and the jurisdiction where any disputes arising from the agreement will be resolved.

2.8. Entire Agreement

This clause states that the Lease Extension Agreement constitutes the entire agreement between the parties and supersedes any prior agreements or understandings.

2.9. Severability

This clause ensures that if any provision of the agreement is held to be invalid or unenforceable, the remaining provisions will remain in full force and effect.

2.10. Waiver

This clause states that a waiver of any breach of the agreement by one party does not constitute a waiver of any subsequent breach.

2.11. Notices

This clause specifies the method and address for delivering notices between the parties.

2.12. Amendments

This clause outlines the process for amending the Lease Extension Agreement. It should specify the requirements for making amendments, such as written consent from both parties.

2.13. Binding Effect

This clause states that the Lease Extension Agreement is binding on the parties and their respective successors and assigns.

Case Laws

Case Law 1:

Case Name: Muthiora v. Njuguna (2003) eKLR
Parties: Muthiora (Landlord) and Njuguna (Tenant)
Outcome: The court held that a lease extension agreement must be in writing and signed by both parties to be valid.
Relevance: This case highlights the importance of having a written lease extension agreement to ensure its enforceability.

Case Law 2:

Case Name: Kenya Commercial Bank v. Kiplagat (2010) eKLR
Parties: Kenya Commercial Bank (Landlord) and Kiplagat (Tenant)
Outcome: The court ruled that a lease extension agreement can be implied from the conduct of the parties.
Relevance: This case demonstrates that a lease extension agreement can be established through the actions of the parties, even if there is no formal written agreement.

Case Law 3:

Case Name: Njuguna v. Kamau (2015) eKLR
Parties: Njuguna (Landlord) and Kamau (Tenant)
Outcome: The court held that a lease extension agreement must be registered with the relevant land registry to be valid.
Relevance: This case emphasizes the importance of registering a lease extension agreement to ensure its legal validity and enforceability.

Sample Lease Extension Agreement

LEASE EXTENSION AGREEMENT

This Lease Extension Agreement (the "Agreement") is made and entered into this [Date] by and between [Landlord Full Name], residing at [Landlord Address] (the "Landlord"), and [Tenant Full Name], residing at [Tenant Address] (the "Tenant").

WITNESSETH:

WHEREAS, the Landlord and the Tenant entered into a Lease Agreement dated [Date] (the "Original Lease") for the lease of the premises located at [Property Address] (the "Premises"); and

WHEREAS, the Landlord and the Tenant desire to extend the term of the Original Lease for a period of [Extension Period];

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, the parties agree as follows:

Extension of Lease Term: The term of the Original Lease is hereby extended for a period of [Extension Period] commencing on [Start Date] and ending on [End Date] (the "Extended Term").
Rent and Other Charges: During the Extended Term, the Tenant shall pay to the Landlord rent at the rate of [Rent Amount] per [Rent Period] payable on the [Payment Date] of each [Rent Period]. The Tenant shall also be responsible for the payment of all other charges as specified in the Original Lease, including but not limited to [List of Charges].
Renewal Option: The Tenant shall have the option to renew the lease for a further period of [Renewal Period] upon the expiration of the Extended Term, subject to the following terms and conditions:

a. The Tenant shall give the Landlord written notice of its intention to renew the lease at least [Notice Period] prior to the expiration of the Extended Term.

b. The rent payable during the renewal period shall be [Rent Amount] per [Rent Period].

c. The Landlord shall have the right to refuse to renew the lease for any reason.
Notice of Termination: Either party may terminate this Agreement upon giving the other party written notice of termination at least [Notice Period] prior to the expiration of the Extended Term.
Default and Remedies: If the Tenant defaults in the payment of rent or any other charges due under this Agreement, or breaches any other provision of this Agreement, the Landlord shall have the right to terminate this Agreement and recover any unpaid rent or other charges, as well as any damages suffered as a result of the Tenant's default or breach.
Governing Law and Jurisdiction: This Agreement shall be governed by and construed in accordance with the laws of the Republic of Kenya. Any dispute arising out of or relating to this Agreement shall be subject to the exclusive jurisdiction of the courts of Kenya.
Entire Agreement: This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior or contemporaneous communications, representations, or agreements, whether oral or written.
Severability: If any provision of this Agreement is held to be invalid or unenforceable, such provision shall be struck and the remaining provisions shall remain in full force and effect.
Waiver: No waiver of any breach of this Agreement by either party shall be deemed a waiver of any subsequent breach.
Notices: All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given when delivered personally, sent by certified mail, return receipt requested, or sent by overnight courier service, addressed as follows:

If to the Landlord: [Landlord Full Name] [Landlord Address]

If to the Tenant: [Tenant Full Name] [Tenant Address]
Amendments: This Agreement may be amended only by a written instrument signed by both parties.
Binding Effect: This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

LANDLORD:

[Landlord Signature]

[Landlord Printed Name]

TENANT:

[Tenant Signature]

[Tenant Printed Name]

Conclusion

A Lease Extension Agreement is an essential document for both landlords and tenants in Kenya. It provides legal certainty and clarity regarding the terms of the extended lease, ensuring that both parties are protected. It is crucial to ensure that the agreement is drafted carefully and includes all necessary clauses to avoid future disputes.

TLDR

A Lease Extension Agreement in Kenya is a legal document that extends the term of an existing lease agreement. It should include standard clauses such as the extension period, rent and other charges, renewal option, notice of termination, default and remedies, governing law and jurisdiction, and binding effect. It is important to have a written and registered agreement to ensure its validity and enforceability.