Three contractual rights every commercial tenant should know by name: Renewal Option, Right of First Refusal (ROFR), and Right of First Offer (ROFO). Each gives the tenant real leverage. Each has a notice deadline. Miss the deadline and the leverage evaporates — sometimes worth millions on a long-term lease.
Renewal options — the basics
A renewal option gives the tenant the unilateral right to extend the lease for an additional term, on terms set in the original lease. The tenant decides; the landlord can't refuse if the option is exercised correctly.
The mechanics
- Notice window: usually 9-12 months before expiration on a 5-10 year lease, sometimes 12-24 months on longer terms
- Form of notice: typically written, sent to the address in the notice clause. “Hey can we talk about renewal” doesn't cut it.
- Rent on renewal: fixed step, market rate, or a pre-agreed escalation. Read the formula carefully.
- Number of options: many leases have multiple successive options (1×5, 2×5, 3×5). Each has its own notice mechanic.
Right of First Refusal (ROFR)
A ROFR gives the tenant the right to matcha third-party offer the landlord receives. It's reactive: the landlord shops the property, brings the tenant a real offer, and the tenant gets a window (often 10-30 days) to accept the same terms or step aside.
What ROFR actually protects
- Acquiring expansion space adjacent to your premises
- Buying the building if the landlord decides to sell
- Leasing the suite next door before a competitor takes it
What kills a ROFR
- Missing the response window after notice arrives
- Landlord drafting a sloppy notice (no firm price, no terms) — tenant must demand a clean notice
- Sale to a related party without genuine market terms (often litigated, sometimes voids the ROFR)
- Landlord transferring the property in a way the lease doesn't cover (foreclosure, deed-in-lieu)
Right of First Offer (ROFO)
A ROFO is the landlord-friendlier cousin of ROFR. The landlord must offerthe space (or the property) to the tenant first, before going to market. The tenant has a window to accept or pass; if they pass, the landlord can shop freely — but can't sell or lease at terms better than what the tenant rejected, without re-offering.
ROFOs come up most in expansion clauses (the suite next door), building purchases, and parking. They're less protective than a ROFR — the tenant has to commit to a deal without seeing what the open market would pay — but they're easier to negotiate into a lease.
The notice mechanics that kill these rights
Every one of these rights dies the same way: a missed deadline, a defective notice, or a notice sent to the wrong address.
Wrong delivery method
Cost of missing:Notice deemed not given. Right is lost.
Most leases require certified mail, overnight courier, or both. Email-only notice usually doesn't qualify — even if the landlord acknowledged receipt.
Wrong recipient
Cost of missing:Same outcome — notice deemed not given.
The notice clause specifies who and where. If the landlord has changed addresses and the tenant didn't update, the original address controls until formally amended.
Missed window
Cost of missing:The right vanishes. The remedy is to renegotiate from a position of weakness.
For renewal options, this is final — there is rarely a cure period. For ROFR/ROFO it depends, but most courts read the windows strictly.
Defective content
Cost of missing:Notice may be reopenable if the tenant catches it — but the burden is on the tenant.
A renewal notice that doesn't reference the option, doesn't state the renewal term, or hedges (“we may want to renew”) can fail.
A tenant's calendar template
For every commercial lease, capture these dates explicitly:
- Renewal option #1 notice opens — date
- Renewal option #1 notice closes — date (this is the deadline)
- Renewal option #2 (and beyond) — same two dates each
- ROFR/ROFO trigger window — when does it start, when does it expire
- ROFR response window — typically tied to receipt of the landlord's notice
Set reminders 60 days before each. Set escalation reminders if no action is taken by 30 days before. The cost of a missed deadline is too asymmetric to leave to memory.
How LeaseBrief surfaces these
Every abstract on LeaseBrief surfaces renewal options, ROFR, and ROFO with their notice windows as first-class critical dates. The system reminds you 90, 60, and 30 days out. We wrote the full list in our critical dates post.