Which clause gives the lessee an option to extend the term?

• A. Sublease
• B. Lessor's Right of Re-entry
• C. Description of Lease Property
• D. Renew Option

Answer: (D)

The renewal option clause is the one that gives the lessee an option to extend the term. In a lease, this clause authorizes the tenant to extend the occupancy for an additional period under terms specified for renewal—such as the length of the extension and the rent—without creating an obligation to do so. The tenant can choose to exercise this right, usually by giving notice within a set timeframe before the current term ends. This is different from a sublease, which transfers some or all of the remaining lease rights to another party; from the lessor’s right of re-entry, which is the landlord’s ability to reclaim the property under certain conditions; and from a description of the lease property, which merely outlines what is being leased. Therefore, the clause that grants the option to extend is the renewal option.