What does 'Lease Extension' mean?

Lease Extension

If you are buying, or own, a leasehold property this is simply something which you may keep for a number of years (the lease length) and then must return to the freeholder. You can, however, increase the lease length. This is done by agreeing with the freeholder (or via arbitration) how much more the property would be worth with the longer lease. This figure is paid to the freeholder.