(1) At any time more than fifteen (15) years after the commencement date of any residential lease from the district, the leaseholder shall have the option to renew and extend the lease for a new sixty-year term by giving the district notice of his exercise of this option to renew.

(2) At any time after the first fifteen (15) years of the term of any residential lease, the then present lessee may obtain from the district a new sixty-year lease on the terms and conditions contained in the then current lease form approved for use in residential leases with the exception of rent. Rent under such sixty-year leases will be payable on the same annual payment date as rent under the lease being renewed. The maximum annual rental under the new lease will be determined by the district as follows:

(a) Renewal of leases with fixed rental (nonescalating). — The district will recompute the annual rental due under the lease being renewed as if the lease had contained annual rents at the fixed amount stated in the lease for the first ten-year period, escalating thereafter at ten percent (10%), rounded to the nearest Five Dollars ($5.00), every five-year period. The annual rental which would have been payable as of the renewal date will be the annual rent payable for the first ten-year period of the renewed lease. Annual rental will escalate thereafter at ten percent (10%), rounded to the nearest Five Dollars ($5.00), every five (5) years. Recomputed annual rental will be payable from and after the first day of the renewed lease term and not for the period prior to renewal.

(b) Renewal of leases with escalating rental. — Annual rental will remain payable in accordance with the terms of the lease being renewed with rental continuing to escalate at ten percent (10%), rounded to the nearest Five Dollars ($5.00), every five (5) years during the renewed term.

(3) The district will charge a reasonable nonrefundable fee for preparation of the renewal lease. The lessee will be responsible for obtaining the consent of any mortgage holder to the lease modification.

(4) At any time a lessee is found to be in default or in breach of the terms and conditions contained in the lease, the district shall give thirty (30) days’ written notice to such lessee before terminating the lease. Such notice shall be by certified mail and shall specifically state the default or breach. If the lessee does not cure the default or breach within thirty (30) days of such notice, then the district shall give written notice to the holder of any mortgage or deed of trust on the leasehold and such holder shall thereupon have thirty (30) days to cure the default or breach before the lease is terminated.