Your Lease Says 25 Years — But Do You Really Have 25 Years? 16

Published on September 3, 2026

When buying a leasehold motel, one of the first numbers everyone looks at is the remaining lease term.

A buyer might be told there are 25 years remaining, and that figure quickly becomes part of the value equation - buyers, valuers and financiers all care about tenure.

But there is an important difference between having a 25-year lease and having, for example, a five-year lease with four further five-year options.

Those options may be valuable, but they are not always automatic.

Know your option dates

Whilst many motel leases include automatic options, there are a number that require an option to be exercised within a particular window, often several months before the current term expires.

Miss the deadline and the consequences can be significant.

The Property Law Act 2023 now provides some protections where an option is disputed because of certain breaches or defects in the way notice was given.

However, operators should not assume the legislation will rescue them from simply missing the option date.

The practical message is simple: know your option dates and diarise them well in advance.

Check the conditions

Many leases, even ones with an automatic option, make the option conditional on the tenant complying with particular requirements. These may include paying rent and outgoings on time and not being in breach of the lease.

Give any notices properly and record the exercised option

Most leases will specify how notice must be given and to whom. An informal conversation with the landlord or an email to the wrong person may not be enough. Operators should follow the notice provisions in the lease carefully and keep evidence that the notice was properly given.

Once the option is confirmed, it is important to ensure that the extended term is recorded in the title.

Buying more time

If you want to add more time to your lease, you will need to negotiate with your landlord about how this can be done and what it will cost. Often, a landlord will negotiate additional years by charging an agreed value per year. Sometimes there will be refurbishment agreed as a trade-off with the landlord.

There are no hard and fast rules about what can be agreed – it is a commercial negotiation.

However, making sure that there is time left on your lease is an important safeguard.

Why it matters when you sell

Lease options become particularly important when a motel is being sold.

Imagine marketing a motel on the basis that it has 20 years remaining, only to discover during due diligence that an option deadline was missed. Or having a sale complicated by the need for an amendment of lease to record the exercised option on the title.

For leasehold motels, tenure and value are closely connected. You need to take notice of your term, make sure your options are exercised, make sure the amended lease is registered and make sure you have plenty of time left on your lease term.