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Frequently Asked Questions:

What is an “evergreen lease” and a “rolling lease”?

“Evergreen lease” and “rolling lease” describe ways that the term (the period of time the lease is in effect) is treated in a lease. See our fact sheet “About the Term.” These names do not have precise, fixed legal definitions, and sometimes they are used interchangeably. Therefore, it’s important for the lease language to define the meaning, rather than to rely on the name of the tool itself.

“Evergreen lease” is most commonly used to describe a lease that automatically renews at the end of the original lease term for another term of the same length, or on a month-to-month basis; without any action by the parties.

A “rolling lease” usually means the term automatically extends at the end of each year for another full term. For example, in a three-year lease, at the end of the first year the lease term is another three years, therefore pushing forward the end date of the lease.

 

Posted in: Lease Agreements, Term, Renewal and Extension