(1)  A lease which includes an option to renew is to specify the period for which the renewed lease is to apply.

(2)  If an option provides that rent for the first year of the option will be at current market rent, the tenant, no less than 4 months or more than 6 months before the expiry of the period, specified in the lease, within which the option may be exercised, may request the landlord to state the proposed rent to apply from the commencement of the new lease period.

(3)  A request under subsection (2) is to be in writing.

(4)  If a request is made under subsection (2) , the landlord is to give written notice of the amount of the proposed rent not less than 3 months before the expiry of the period to exercise the option.

(5)  Within 30 days after receiving the landlord’s notice under subsection (4) , the tenant is to notify the landlord that the tenant –

(a) exercises the option at the rent proposed; or

(b) does not agree with the rent proposed, but wishes to negotiate an amount in accordance with section 43 .

(6)  If a landlord fails to comply with this section, the rent to apply in the first year of the new lease period is to be determined in accordance with section 43 .

(7)  If a tenant fails to comply with this section, the rent proposed by the landlord is to be the rent that is payable in the first year of the new lease period.

(8)  If a tenant does not make a request under subsection (2) , or notifies the landlord that the tenant wishes to negotiate the rent under subsection (5)(b) , the landlord and tenant may agree, at any time before the option is due to be exercised, on the rent that is to apply in the first year of the new lease period.

(9)  If a landlord and tenant cannot agree on the rent to apply under an option, either party may initiate an independent valuation in accordance with section 43 before the expiry of the period within which the option may be exercised.

(10)  A landlord may refuse to grant a new lease if –

(a) the tenant does not exercise the option by the required date; or

(b) at the time of exercising the option or before the commencement of the new lease, the tenant is in default under the existing lease.

(11)  Despite subsection (10) if a tenant or a landlord initiates an independent valuation, in accordance with section 43 , under subsection (9) and the period within which an option may be exercised expires while the independent valuation is being carried out, the period to exercise that option is taken not to expire until one month after the tenant or landlord receives a valuation of current market rent in accordance with section 43(6) .