View Full Version : Selling a property that has renters...
04-02-2001, 01:27 PM
OK, all of you lawyer-types....I've been scouring google.com for an answer to this question, but I can't find anything definitive.
I'm looking at an apartment in a house that's up for sale. If I sign a 1-year lease on this apartment, and the house is later sold, what happens to me? Will the new owner be obligated to honor my lease until it expires, or could I be forced to move out as soon as the new owner takes possession? I can't decipher from what I've read whether the lease would automatically transfer as a matter of law, or if I'd have to have something specifically written in the lease that I get to stay even if the house is sold.
Does anyone know for sure? If it does, in fact, need to be written in the lease, what language do I need to make sure is included in order to protect myself?
04-02-2001, 04:21 PM
The new owners are bound by the lease. Look over the lease carefully. They are usually written so that it is easier for the leasor to get out of it than the leasee [you].
04-02-2001, 05:32 PM
IANAL, but I do own rental property. The rules will vary by state, but in Texas if you sell a rental property, any leases normally become null and void.
04-02-2001, 05:35 PM
IANAL but I am a commercial real estate agent who writes a lot of commercial leases. Residential leases may differ somewhat but typically the new owners must honor the lease. The exception is if the current (or new) owner goes into bankruptcy. All leases I typically write or review are subject to the mortgage if one is present and the bank has the power to void all leases in this situation if they so choose. Most of the time this is a non-issue as the value of of a leased investment property is/are the leases in place and the last theing a bank wants to do is lose the existing income (unless it's way below market) and the opportunity to sell it to another investor for a reasonable price.
04-02-2001, 05:39 PM
IANAL but I am a commercial real estate agent who writes a lot of commercial leases. Residential leases may differ somewhat but typically the new owners must honor the lease. The exception is if the current (or new) owner goes into bankruptcy. All leases I typically write or review are subject to the mortgage if one is present and the bank has the power to void all leases in this situation if they so choose. Most of the time this is a non-issue as the value of of a leased investment property is/are the leases in place and the last thing a bank wants to do is lose the existing income (unless it's way below market) and the opportunity to sell it to another investor for a reasonable price.
04-02-2001, 06:42 PM
This would depend on the state you are in. Try Tenants Handbook for the state you are in. They have stuff like that at nolo.com (Nolo Press)....read your contract too.
04-02-2001, 08:05 PM
I usually go to Tenant Net (http://www.tenant.net) for help with issues like this.
The laws vary by city and state.
For example, in Washington, the restriction is:
When The Property Is Sold
The sale of the property does not automatically end a lease or month-to-month rental agreement. When a property is sold, tenants must be notified of the new owner's name and address, either by certified mail, or by a revised posting on the premises.
All deposits paid to the original owner must be transferred to the new owner, who must put them in a trust or escrow account. The new owner must promptly notify tenants where the deposits are being held.
For no cause.
Except in the city of Seattle, landlords can evict month-to-month tenants without having or stating a particular reason, as long as the eviction is not discriminatory or retaliatory. The tenant must be given a 20-day notice to leave, and must receive the notice at least 20 days before the nexxt rent is due. The tenant can only be required to move out at the end of a rental period. (the day before a rental payment is due). Usually, a 20-day notice cannot be used if the tenant has signed a lease.
Unfortunately for renters, there is an exclusion that would apply in your case:
The owner wishes to occupy the premises personally, or the owner's immediate family will occupy the unit, and no substantially equivalent unit is vacant and available in the same building. Immediate family includes the spouse, parents, grandparents, children, brothers and sisters of the owner or owner's spouse.
If this happened at the house you were renting, where the new owners wanted yer space, they could evict you with 20 days' notice. :(
So check out your local laws and see if they're strict enough for what you'd feel comfortable with.
04-02-2001, 08:09 PM
Depends entirely on the jurisdiction in which you live. Here in Ontario, there would be some paperwork and a notice period, but ultimately if the new landlord wanted the property for his or her own personal use, the answer would be "Bu-bye!" The same pretty much goes for renovations in most instances, though there are exceptions. About the only shot you would have would be if the new landlord wanted to turf you simply to find a higher paying tennant.
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