Do my CAM protections carry over when I renew my lease?

Only if the renewal clause explicitly says so. Many renewal options state that the lease renews on the "same terms and conditions," which should include CAM provisions. However, some landlords argue that "same terms" does not include CAM caps or specific exclusions. Get this in writing.

What happens to my base year when the lease renews?

The base year typically resets to the year immediately preceding the renewal term. This means the new baseline could be higher than the original base year, reducing your expense stop protection. Negotiate that the new base year is based on actual, verified expenses.

Should I audit CAM charges before exercising my renewal option?

Absolutely. CAMAudit can verify the accuracy of current charges before they become the basis for your new base year. If operating expenses have been inflated, that inflated number becomes your new baseline. Auditing before renewal ensures you start the new term with accurate figures.

Renewal Option Clause

Last updated: April 2026

By Angel Campa, Founder

When your lease renews, CAM caps may expire, base years reset, and exclusions may vanish unless the renewal clause explicitly preserves them.

What Is a Renewal Option Clause?

A renewal option clause gives the tenant the right (but not the obligation) to extend the lease for one or more additional terms at pre-negotiated or market-rate rent. The clause specifies the number of renewal periods, the length of each, the rent determination method, the notice deadline, and whether other lease terms (including CAM provisions) carry forward unchanged.

Why This Clause Matters for CAM Audits

Renewal options are a critical moment for CAM protections. When a lease renews, the base year typically resets, CAM caps may expire, and expense exclusions may change. If the renewal clause does not specify that existing CAM protections carry forward, the tenant may lose hard-won provisions. The new base year amount also sets the stage for all future expense pass-throughs.

Sample Lease Language

“Tenant shall have two (2) options to renew this Lease, each for a period of five (5) years, upon the same terms and conditions as the initial term except for Minimum Rent, which shall be adjusted to the then-prevailing fair market rate. Tenant shall exercise each renewal option by providing Landlord with written notice not less than twelve (12) months prior to the expiration of the then-current term. All Operating Expense provisions, including caps, exclusions, and audit rights, shall remain in full force during each renewal term. The Base Year for Operating Expenses during each renewal term shall be the actual Operating Expenses for the calendar year immediately preceding the renewal term commencement.”

This is illustrative language only. Your actual lease language controls your rights.

Red Flags to Watch

⚠CAM caps, exclusions, or audit rights do not survive into the renewal term
⚠Renewal is at "market rate" without a specific methodology or arbitration process for determining the rate
⚠Notice deadline is too early (24+ months before expiration)
⚠Landlord can change operating expense terms as a condition of renewal
⚠Base year resets to an estimated or budgeted amount rather than actual expenses

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Negotiation Tips

✓Explicitly state that all CAM provisions (caps, exclusions, audit rights, holdback rights) carry forward into renewal terms
✓Define a clear process for determining fair market rent, including binding arbitration if the parties cannot agree
✓Set the renewal notice deadline at 9-12 months before expiration
✓Require the renewal base year to be based on actual expenses, not estimates or the landlord's budget

Key Data

60-75%
An estimated 60-75% of commercial leases include at least one renewal option [industry estimate]
Source: Commercial Lease Terms Research (2024)

Explore Other Lease Clauses

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Frequently asked questions

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This page provides general educational information. It is not legal advice and may not reflect the most current law in your state. Consult a licensed attorney for advice specific to your situation.