It is advisable to apply for extension of lease before the term expires to avoid a scenario where property ownership hangs in limbo as in the case when the lease expires and thus reverts to the lessor until that time when the lessor will approve the renewal of lease.
Likewise the lessee must always read and implement conditions stipulated in the lease to ensure compliance and reduce chances of denial of extension/renewal of lease due to breach of contract.
Statutory fees like annual rent and rates should always be paid on time to avoid penalties and comply with set conditions. Remember the lessor reserves the right to grant an extension/renewal of lease and compliance to conditions imposed by the lessor enhances chances of the extension/renewal of term.
In practice the government as a lessor has always been fair to lessees and extension/renewal is usually granted if conditions of the previous lease were adhered to and the land is not required for a public purpose.