Renewing a lease agreement may look, at first glance, like a formality. The premises are already in use, rent is being paid, the parties know each other, and the simplest solution may seem to be signing an addendum extending the term for another one, three or five years.
In reality, renewal is precisely the moment when the parties should check whether the rules agreed at the beginning of the relationship still reflect the situation today. Over a few years, the rent may change, the way the premises are used may evolve, the condition of the property may deteriorate, the tenant’s business structure may change, and significant investments may have been made in the premises.
The Civil Code of the Republic of Moldova regulates lease relationships in Articles 1251–1287. For immovable property, a lease agreement must be concluded in writing, and the lease term may not exceed 99 years.
Beyond these general rules, there are at least five clauses worth revisiting before the parties decide to continue the lease.
1. What Does “Renewal” Actually Mean?
The first point to check is the mechanism by which the lease continues after its expiry date.
One agreement may provide for automatic renewal unless either party gives notice of termination. Another may require the parties to sign a mandatory addendum. In other cases, the agreement simply expires on a specified date, but the parties continue performing it in practice without signing anything further.
That last scenario has legal consequences. Article 1279 of the Civil Code provides, among other things, that a lease terminates upon expiry of its term. However, Article 1280 states that if the contractual relationship continues tacitly after expiry, the lease is deemed renewed for an indefinite term.
The distinction is not merely semantic. For an indefinite-term lease, the Civil Code allows either party to terminate the relationship by giving three months’ notice in the case of immovable property and one month’s notice in the case of movable property. If the notice does not comply with the statutory or contractual notice period, it takes effect only once that period has expired.
Before renewal, the parties should therefore be clear about whether they want a new fixed term or are prepared to continue on an indefinite basis. For a company investing in retail premises, offices or a production facility, the difference may be substantial: a five-year fixed term provides a very different level of predictability from an arrangement that may be terminated on a few months’ notice.
The Civil Code also grants a tenant that has properly performed its obligations a priority right to enter into a lease for a new term if the property is offered for lease again and the tenant accepts the landlord’s new terms. A “priority right” does not therefore automatically mean a right to continue the lease at the same rent and under the same conditions.
2. Yesterday’s Rent Should Not Automatically Become Tomorrow’s Rent
A lease signed several years ago may contain a rent level that no longer reflects current economic conditions. Equally problematic is an indexation mechanism drafted too vaguely: “in line with inflation,” “according to market prices,” or “at the landlord’s discretion.”
Renewal is the right moment to turn those formulations into a predictable mechanism.
Article 1263 of the Civil Code starts from the principle that rent may be changed by agreement between the parties. In certain circumstances, the landlord may ask the court to adjust the rent, but only once per year and where changes in economic conditions would make the absence of an adjustment inequitable, unless the landlord has assumed the risk of such changes.
In practice, it is far more useful for the parties to agree in advance what will happen to the rent during the renewed term: whether it remains fixed, whether it is indexed annually, which index applies, when the adjustment takes effect, and whether there is a cap or a minimum threshold.
It is equally important to distinguish rent from other charges. Article 1262 provides that additional expenses are payable only if the parties have agreed on them.
For that reason, formulations such as “rent plus management costs” should be unpacked. The agreement should state what those costs actually include: utilities, common-area services, security, cleaning, maintenance, taxes or other charges.
There is also the reverse situation. If the condition of the property or the agreed conditions of use deteriorate, Article 1263 gives the tenant the right, subject to the statutory requirements, to request a reduction in rent.
A rent review at renewal should therefore not be approached solely as a discussion about a possible increase. It is also the moment when the parties can rebalance the economics of the lease as a whole.
3. Who Repairs, and Who Pays?
After several years of use, the distinction between “current repairs,” “normal wear and tear” and “capital repairs” is no longer theoretical.
The Civil Code places the ordinary costs of use and maintenance on the tenant and, as a rule, also requires the tenant to carry out current repairs. At the same time, the law explains that current repairs are those arising from use of the property that can fairly be placed on the tenant, taking into account the nature of the property, its intended use and the duration of the lease.
There is, however, an important limit: the tenant is not required to carry out current repairs merely to remedy normal wear and tear. Article 1265 expressly provides that the tenant is not liable for normal wear and tear where the property has been used in accordance with its purpose and the lease. The Code describes this as the ordinary and unavoidable signs of prudent use and proper maintenance.
Capital repairs are treated differently. Under Article 1274, they are the landlord’s responsibility unless the law or the agreement provides otherwise. In all cases, the landlord is also responsible for repairs required to remedy damage caused by an event outside the control of the tenant or of persons whom the tenant allowed to access the property.
Renewal is therefore a good time to inspect the actual condition of the premises. If the electrical system, heating, roof, façade or other significant components require work, it is much easier to agree before renewal who will carry out those works, by when, and at whose cost.
A broad clause stating that “all repairs are borne by the tenant” can become the source of a serious dispute precisely when an expensive defect appears.
4. Does the Agreement Still Reflect How the Property Is Actually Used?
A company may initially lease premises as an office and, several years later, use them partly as a showroom, storage area, client-facing space, or together with other companies in the same corporate group.
From a contractual perspective, those changes should not be ignored.
Article 1264 requires the tenant to use the property in accordance with its intended purpose and the terms of the agreement, while Article 1261 provides that neither the landlord nor the tenant may unilaterally change the form or intended use of the property during the lease. Use of the property contrary to its designated purpose or the agreement may also constitute grounds for termination by the landlord.
At renewal, it is therefore worth checking whether the permitted-use clause still reflects reality.
The same applies where the premises are used by other companies, partners or affiliated entities. Article 1270 provides that subleasing or assignment of the lease requires the landlord’s consent. At the same time, the law restricts unjustified refusals where the tenant has a legitimate interest and requires a landlord that refuses consent to state its reasons within 15 days; otherwise, consent is deemed to have been given.
For a business, it is therefore worth negotiating expressly whether the premises may be used by affiliated companies, whether full or partial subleasing is allowed, and what happens to the lease in the event of a restructuring or transfer of the business.
This is also the right place to revisit investments made in the premises. Under Article 1285, when the lease ends, the tenant may, in certain circumstances, remove improvements made with the landlord’s permission if this can be done without damaging the property, or may claim compensation for their value unless the law or the agreement provides otherwise.
Where significant capital expenditure has been made, this issue should not be left until the day the tenant has to vacate the premises.
5. How Do We Exit If the Relationship Stops Working?
Although a lease is renewed precisely because the parties intend to continue their relationship, renewal is also the right time to review how that relationship can end.
Article 1282 of the Civil Code allows the landlord, among other things, to seek termination where the tenant uses the property contrary to its purpose or the agreement, culpably worsens its condition, fails to pay rent for three months after it becomes due — unless the agreement provides otherwise — or subleases without the landlord’s consent. The law also allows the parties to agree on additional grounds for termination.
These rules make it important to review the provisions on contractual breaches, cure periods and notices. Not every problem should lead immediately to termination, and a clear cure mechanism may prevent unnecessary disputes.
There is also one point that can easily be overlooked at renewal. Article 1280(3) expressly provides that a guarantee granted by a third party for the tenant’s obligations does not extend to the renewed lease.
If the tenant’s obligations are supported by a parent company guarantee, a shareholder guarantee or another form of third-party security, renewal of the main lease should not automatically be treated as renewal of that guarantee. The security documents should be reviewed separately.
Finally, the agreement should state as clearly as possible what happens to the property when the lease ends. Article 1284 requires the tenant to return it in the condition in which it was received or in the condition agreed in the contract, and damage attributable to the tenant may give rise to liability. If the property is not returned on time, the landlord may claim rent for the entire period of delay and, where applicable, compensation for any additional loss not covered by that rent.
Normal wear and tear matters here as well. Premises used for five or ten years cannot reasonably be expected to look exactly as they did on day one, and the law distinguishes between damage attributable to the tenant and the natural consequences of prudent use.
Renewal Is Really a Renegotiation
The simplest lease addendum is the one that changes a single date: “the term of the lease is extended until…”
But the simplest document is not always the safest one.
Renewal is a natural opportunity to check what has changed since the agreement was originally signed: the economic value of the lease, the condition of the property, investments made in the premises, the way the space is used, the tenant’s business structure and the risks each party is still willing to assume.
Sometimes that review will show that extending the term is enough. In other cases, the parties may need to update the rent, repair obligations, permitted use, guarantees or termination mechanism.
The important point is not to renew by inertia. A lease that has worked well until today can continue to work well tomorrow — provided that it reflects the relationship the parties actually have now, rather than only the one they imagined when they first signed it.
This material is intended for general informational purposes. The application of the rules may vary depending on the nature of the property, the status of the parties, the specific terms of the agreement and any special rules applicable to particular categories of leases.