1yr office lease term but with auto renewal 1yr every year

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xmartin86x
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Joined: 23 Jun 2022, 12:24

1yr office lease term but with auto renewal 1yr every year

Post by xmartin86x »

Hi all,

As per subject, would this considered under short term lease?
The office lease is 1yr and it will auto renew 1 yr each time it expires.
Same location.

Regards,
Martin
Leo
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Joined: 05 Apr 2020, 22:31

Re: 1yr office lease term but with auto renewal 1yr every year

Post by Leo »

Totally agree, great materials !

Also here :

https://www.iris.co.uk/blog/misc/what-i ... h-example/

"Tactically Using Repeat Short-Term Agreements Is Not Allowed"
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Marek Muc
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Re: 1yr office lease term but with auto renewal 1yr every year

Post by Marek Muc »

Leo wrote: 02 Aug 2022, 19:51 "Tactically Using Repeat Short-Term Agreements Is Not Allowed"
By whom? :lol:
JRSB
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Re: 1yr office lease term but with auto renewal 1yr every year

Post by JRSB »

It would be odd to do 11 month contracts just to avoid lease accounting, for all sorts of commercial and legal reasons, if you actually need the asset for longer than that. Probably only related party arrangements that are trying to do that.
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Marek Muc
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Re: 1yr office lease term but with auto renewal 1yr every year

Post by Marek Muc »

It is actually quite common in Poland to have an evergreen real estate lease contract with a relatively short notice period. Even for quite important locations.
JRSB
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Re: 1yr office lease term but with auto renewal 1yr every year

Post by JRSB »

Ok, here on the larger commercial deals you'd see fairly long leases with a break option.
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