Lease renewal checklist for a café or restaurant: the notice deadline, your occupancy cost and what to renegotiate
The lease you signed before opening had a five-year term and "one option to renew for five years, on written notice." Four years and seven months later, someone finally rereads it and finds the notice was due 180 days before the end of the term, by certified mail, to an address the landlord no longer uses. The option you paid for is gone, and the landlord knows it.
Dates decide a lot of a lease renewal. This post gives you a countdown that starts a year out, a worksheet for what the space really costs you, the clauses to reread before you sign anything, the Florida tax change worth checking, and two letters.
General information, not legal advice. A lease is a contract: what it says controls, and a commercial real estate lawyer should read any renewal or amendment before you sign it. Lease terms below in [brackets] are examples, not standard terms.
Find these five things first
Open the lease and every amendment, and write these down before anything else:
Item | Where it usually is | Yours |
|---|---|---|
When the term ends | The term or "commencement and expiration" section | [date] |
The renewal option: how many, how long, and the rent for the option term (fixed, a % increase, "fair market rent") | Option or renewal section, sometimes a rider | [ ] |
The notice deadline: how many days or months before the end, and the window (not earlier than / not later than) | Same section | [date: work it out] |
How notice must be given: in writing, certified mail, courier, email allowed or not, to which address | The notices section | [ ] |
Conditions on the option: not in default, still operating, the original tenant only | Same section | [ ] |
Put the notice deadline on every calendar you have. If the lease says notice must be "received" by a date, send it early enough to arrive.
The 12-month countdown
When | What |
|---|---|
12 months before the term ends | Find the five items above. Pull 12 months of sales. Fill in the occupancy worksheet below. |
10–11 months | Decide: renew as is, renew and renegotiate, or look at other spaces. Look at a few listings and ask a commercial broker what similar spaces nearby rent for. |
9 months | List what you want changed (the clause review below). Talk to your lawyer and accountant. |
8 months | Send the "opening talks" letter to the landlord. |
6–8 months | Negotiate. Get any agreement in a written amendment, reviewed by your lawyer. |
Before the notice deadline | Send the notice exercising your option, the way the lease says, even if talks are still going, unless your lawyer advises otherwise. Keep proof of delivery. |
Before the term ends | Signed amendment in hand. New rent and dates in your books. Insurance certificates updated for the landlord. |
Your notice deadline may be earlier than six months: move the whole table back if it is.
What the space costs you
Occupancy cost is everything you pay to be in the space, as a share of sales. Work it out for the last 12 months, then for the renewal offer.
Occupancy cost worksheet · [location] · [12 months ending ……]
Line | Last 12 months | Renewal offer, year 1 | Notes |
|---|---|---|---|
Base rent | $ | $ | |
CAM / common area charges, including the year-end reconciliation | $ | $ | |
Property tax passed through | $ | $ | |
Landlord's insurance passed through | $ | $ | |
Percentage rent (if any) | $ | $ | |
Sales tax on rent (Florida, rental periods before October 2025 only) | $ | $0 | See below |
Total occupancy cost | $ | $ | |
Net sales | $ | $ [your forecast] | |
Occupancy cost ÷ net sales | % | % |
Rent steps over the option term: year 1 $ …… · year 2 $ …… · year 3 $ …… · year 4 $ …… · year 5 $ ……
There's no right percentage that fits every concept and location. What matters is the trend (is the space taking a bigger share of sales each year?) and what you could get elsewhere, moving costs included. Our break-even post shows how rent sits among your fixed costs.
Florida: the sales tax on commercial rent is gone
For years, Florida charged sales tax on commercial rent. The Department of Revenue's notice: "Effective October 1, 2025, the state sales tax imposed on rent or license fees for the use of real property (commercial rentals) under section 212.031, Florida Statutes (F.S.), is repealed. This means no state sales tax or discretionary sales surtax applies to rent or license fees for rental or occupancy periods beginning on or after October 1, 2025." Rent for periods through September 2025 stays taxable "even if payment is made on or after October 1, 2025" (Florida DOR, TIP 25A01-04).
Two things to check: that your landlord's invoices stopped adding sales tax on rent for October 2025 onward, and that a renewal amendment drafted from an old template doesn't put a sales-tax-on-rent line back in. (Tax on other things, such as parking, works differently; the same notice lists what's excluded from the repeal.)
The clauses to reread before you renew
Clause | What to look for | Ask for |
|---|---|---|
Rent and steps | The option rent: fixed, a set increase, or "fair market" with no method | A fixed step, or a fair market method with an appraiser process and a cap |
CAM and pass-throughs | What's included, any cap on increases, your right to see the landlord's numbers | A cap on controllable CAM; an audit right; the reconciliation by a set date |
Repairs and replacements | Who replaces the HVAC, the roof, the walk-in's condenser, the grease trap, the hood | The landlord replaces building systems at end of life; you maintain |
Accessibility (ADA) | Who pays for access work in the space and the common areas | A clear split. Under the federal rule, "Both the landlord who owns the building that houses a place of public accommodation and the tenant who owns or operates the place of public accommodation are public accommodations", and between them, responsibility "may be determined by lease or other contract" (28 CFR 36.201(b)). Our ADA basics for a café covers what applies |
Use and exclusive | What you're allowed to serve; whether the landlord can lease next door to a competitor | A use clause broad enough for a menu change; an exclusive for your category |
Assignment and sale | Whether you can sell the business with the lease, and the landlord's consent standard | Consent "not unreasonably withheld"; a sale of the business allowed |
Personal guarantee | Does it renew with the lease? For how much? | A cap, or a guarantee that burns off after a period of on-time rent |
Relocation | Can the landlord move you within the center? | Delete it, or the landlord pays for the move and the build-out |
Co-tenancy | Rent relief if the anchor tenant leaves | Reduced rent while the center is below a set occupancy |
Hours and operating covenant | Required hours; a "continuous operation" clause | Hours that match your concept, and the right to close for a slow season or a remodel |
Signs, patio and outdoor space | Your rights to signs and a patio, and who gets the permits | Written rights, with the landlord's cooperation on permits |
Insurance | The limits and endorsements the landlord requires | Requirements your agent can meet; certificates on renewal (see our certificates of insurance post) |
Holdover | Rent if you stay past the end without a deal, and how much higher it is | A modest holdover rate, month to month |
Surrender and restoration | What you must remove or restore when you leave: hood, walk-in, grease trap | Improvements stay with the space; no restoration of the kitchen |
Notices | The addresses and methods for notices | Current addresses, email allowed as well as mail |
Our location and lease post has the questions for a first lease; most of them apply again at renewal.
Letter 1: opening talks
[Your business name] · [address] · [date]
To: [landlord or property manager, notice address from the lease]
Re: Lease dated [date] for [premises address], renewal
Dear [name],
Our lease term ends on [date], and we'd like to talk about staying. We've operated [business name] at [address] since [year] and would like to renew for [term].
Before the option notice date of [date], we'd like to discuss [the option rent / the CAM charges / responsibility for the HVAC replacement / …]. Could we meet in the next [few weeks]?
This letter isn't the notice under [section] of the lease. [Optional: We intend to send that notice before the deadline.]
Sincerely, [Name] · [Title] · [Phone, email]
Letter 2: exercising the option
Have your lawyer check this one against the lease. Send it the way the notices section requires, and keep proof.
[Your business name] · [address] · [date]
Sent by [certified mail, return receipt requested / courier / the method in section ……] to [notice address in the lease]
Re: Notice of exercise of renewal option · Lease dated [date] for [premises address]
Dear [name],
Under [section] of the lease dated [date] between [landlord] and [tenant], [as amended on ……], [tenant] exercises its option to renew the lease for [term], from [date] to [date].
Sincerely, [Name] · [Title], for [tenant's legal name]
Your lease renewal checklist
- [ ] Term end, option, notice deadline, notice method and conditions written down
- [ ] Notice deadline on every calendar, with a reminder a month before
- [ ] 12 months of sales and occupancy costs worked out
- [ ] Comparable spaces and moving costs looked at
- [ ] Clause list reviewed, with what you want changed
- [ ] Florida: no sales tax on rent for periods from October 2025
- [ ] Opening-talks letter sent
- [ ] Option notice sent the way the lease says, with proof of delivery
- [ ] Amendment reviewed by your lawyer, signed, and filed with the lease
Where Mays fits
- The sales side of the worksheet. Insights → Prime Cost shows Revenue (net sales from your POS, without tax and tips) by Month for any dates you set, next to labor and food cost. That's the denominator for occupancy cost. See Prime cost.
- The lease where you can find it. Upload the lease, every amendment and the landlord's CAM reconciliations to a private Knowledge Base folder (a new top-level folder starts private to you and your admins). See Your knowledge base and Who can see what in the knowledge base.
- The deadline on someone's list. In the app, create a one-off task such as Send lease option notice (certified mail) with its Due Date a month before the deadline, assigned to yourself. See Creating one-off tasks.
What Mays doesn't do: it doesn't track rent, CAM or other occupancy costs, so occupancy isn't part of Prime Cost or any report, and it doesn't read or track lease dates. The worksheet and the reminder task are yours to fill in. Our year-two checklist (coming Jan 15) has the other renewals to put on the same calendar.
Find the notice date first, then know your numbers before the landlord calls
A renewal goes best when you're the one who starts it: a year out, with the notice deadline on the calendar, 12 months of sales and occupancy cost on one page, and a short list of clauses you want changed. Send the notice the way the lease says, and get the deal in a signed amendment.
Start your free trial: 30 days, every module, no card needed. Or book a walkthrough and we'll show you your sales by month in Mays.