When a commercial lease is about to end, many people assume that an “extension” and a “renewal” are the same thing. They are not, and confusing them can have serious consequences: that difference determines the actual date the lease ends, when notice of termination must be given, and whether or not the premises must ultimately be handed back.
What Is the Difference?
An extension simply continues the same lease on the same terms already agreed. A renewal, by contrast, is a special right the law grants to a merchant who has run their business in the same premises for at least two consecutive years: it lets them stay in the premises for a new term even if the landlord does not want them to.
This right is not only meant to protect the use of the premises, but something deeper: the value the merchant built there over time — that is, its customer base, its name, and its reputation at that particular location.
A recent case illustrates this well: a lease had a clause providing that, once its initial five-year term expired, it would automatically extend every six months. When the landlord decided not to continue and sought return of the premises, the tenant argued that the renewal regime should apply. The Superior Court of Cartagena held, however, that under what the parties themselves had agreed in the contract, what was in effect was a six-month extension — not a renewal — and that this was therefore the term that governed everything else, including the notice of termination.
Termination Notice: What It Is and When Compensation Is (or Isn't) Owed
A termination notice, in simple terms, is the formal notice a landlord gives a tenant informing them that the lease will not continue, and why. The law requires this notice to be given at least six months before the termination date, precisely so the merchant has time to find another location and move the business without losing its customers.
A landlord cannot refuse to renew for just any reason. They may only do so for specific reasons the law recognizes, among them: that the landlord needs the premises to carry on their own business there, different from the tenant's. If the landlord gives timely notice and the reason is genuine, no compensation is owed.
The problem arises when a landlord invokes a ground and then fails to follow through on it — for example, saying they will use the premises for their own business but never actually doing so, or leasing it to someone else instead. In that scenario, the merchant who had to vacate the premises is entitled to compensation.
When There Is No Agreement on the New Rent
Another frequent source of conflict is how much rent should be paid during the new term when the landlord and tenant cannot reach an agreement. Colombia's Supreme Court addressed this in July 2026, in a case involving the renewal of a lease for a service station: when there is disagreement over the rent, the judge cannot simply set it at their own discretion. Article 519 of the Commercial Code requires the involvement of an expert appraiser, and the Court held that this expert evidence is not optional or secondary but a mandatory requirement for resolving the disagreement — although the judge is likewise not required to adopt the exact figure the expert proposes.
In the specific case, the Court overturned the Antioquia appellate court's decision because it had set the rent based on other evidence (the contract, internal calculations, and witness testimony) after ruling both parties' expert appraisals deficient, instead of ordering a new expert appraisal, as the law requires.
In Short: What Each Party Should Keep in Mind
If you are a tenant and your business has operated in the same premises for two years or more, you have a right of continuity that the law protects, but it is essential to carefully review what your lease says about terms and extensions, because that can change the rules of the game.
If you are a landlord, giving timely notice and having a genuine, verifiable reason not to renew is what protects you from potential liability for damages. And if the disagreement concerns the rent amount, both parties should know that the law requires that discussion to be backed by expert evidence, not merely by what each side considers reasonable.
Need Help With Your Case?
Every commercial lease has its own particulars, and the conclusions in this article are general observations, not advice on a specific case. If you are a landlord or a tenant and want a detailed review of your situation, at Iniciativa Legal we can assist you, regardless of which side of the contractual relationship you are on.
Sources: Superior Court of Cartagena, Civil-Family Chamber, Docket No. 13001-31-03-005-2018-00458-02, ruling of June 1, 2021, Reporting Judge Marcos Román Guío Fonseca (ramajudicial.gov.co); Colombia's Supreme Court, Civil, Agrarian and Rural Cassation Chamber, SC613-2026, Docket No. 05615-31-03-002-2022-00149-01, July 14, 2026, Reporting Judge Adriana Consuelo López Martínez.
This article is for general informational purposes only and does not constitute legal advice for any specific case. If you have a situation involving the renewal, extension, or return of a commercial lease, contact us for a specific evaluation of your case.