REAL ESTATE LAW QUESTION.

[Faithful Retrievers]

If you were looking into buying a building that has a tenant in it, but you did not want the tenant in there if you bought it. What could be done legally to end the lease? The lease runs up in December, but has some kind of 5 year renewal agreement. I would like to put the SOB out today if I could. No there have not been any illegal reasons that I could evict on, if I bought this building. Would it be possible to raise the rent on them even if the old renewal has an amount? Any ideas to get them out? (legally)

[regishay]

I thought you could just post a notice giving the tenant 30 days to vacate the building would be good enough.

[Faithful Retrievers]

That was my impression, but I was told that was incorrect. That legally I could not break the contract. I said how can I do it illegal then. Like that song gone is gone.

[Hole Hunter]

That lease should be null and void given there is a new owner. Get a copy of the lease and read over it very well. I bet if the building changes hands the lease agreement is terminated. You should be able to give them 30-60 days to hit the road with no problem.

[Cotten]

That lease should be null and void given there is a new owner. Get a copy of the lease and read over it very well. I bet if the building changes hands the lease agreement is terminated. You should be able to give them 30-60 days to hit the road with no problem.

With due respect; this is 100% incorrect.

You will buy the property subject to the lease. The lease agreement in place will determine what you can and can not do. For example, my residential leases had a clause in them stating if the property ownership changed, the new owner could null and void the lease at his option. With out this or another similar clause, a change in ownership will not affect the terms of the lease.


DISCLAIMER: All information contained herein and expressed otherwise is deemed reliable, but is not warranted. No warranty or representation, expressed or implied, is made as to the accuracy of the information contained herein.

[GordonGekko]

generally speaking cotten is right, leases run with the land and do not terminate upon change of ownerhip in the land.... consult an attorney in you specific location for potential remedies....

[amwoodIE]

set it on fire they will run like hell

[Faithful Retrievers]

What if the lease agreement is vague and it makes no mention to ownership change? That would go in the favor of the leasee. Also I would think that the renewal option would allow me to jack the price on the rent if it did not state the lease amount on renewal. If you made the option to renew ten years ago in the contract for that price could you not change the price due to inflation, if you stated an amount? I have consulted an attorney and he is reading up on it. It just doesn't make since that a new owner would have to honor someone elses contract.

[OleMissMallard84]

It all depends on how the lease is written but the new owner has to honor the current lease till it expires. You have a couple options you can do thought. You can make life so bad that they want to move out or you can buy them out. As for the renewal again it all depends on how the lease is written but it should not have a stated price that the renewal is. I do mine that way so that if taxes, insurance, property management, ect go up you can raise the rent to cover it. But again it is all about how the lease is written. PM or give me a call if you have any questions. My cell is (228) 326-1155.

[Cappy_TX]

generally speaking cotten is right, leases run with the land and do not terminate upon change of ownerhip in the land.... consult an attorney in you specific location for potential remedies....

Generally correct but varies by state. Most states require that the tenant RECORD the lease thereby providing constructive notice to any 3rd party that there is something that allegedly has a contractual effect on title, use of the property, etc., and that a buyer may not be held accountable unless that constructive notice is provided. It's much like a lien, a new owner is NOT obligated for lien claims incurred by the prior owner of the property unless they are RECORDED or are Statutory in nature such as real estate taxes. Imagine if the seller went out and borrowed tons of money from 3 or 4 lenders just before he sold to you, and none of those lenders bothered to record their liens. Tough ... they are out of luck. If that wasn't the case why would anyone in their right mind buy a property if they can't verify liens, encumbrances and adverse claims before concluding the purchase?

With respect to renewal options and dollar amounts, it's kind of silly to speculate what you can or can't do ... or ask people here what your options are. If the lease is worth duck snot it will very specifically call out the renewal terms, conditions and prices. If it doesn't, you most likely are free to do whatever you wish.

Now for my best advice ... do not take advice from me or people like me on line. That's why you need an attorney. I must admit it concerns me a little to see that the attorney was "studying up on it a little". Yikes.
Good luck.

Oh, and no ... I'm not an attorney but I stayed at a Holiday Inn Express not too long ago.

[TODO]

generally speaking cotten is right, leases run with the land and do not terminate upon change of ownerhip in the land.... consult an attorney in you specific location for potential remedies....

Generally correct but varies by state. Most states require that the tenant RECORD the lease thereby providing constructive notice to any 3rd party that there is something that allegedly has a contractual effect on title, use of the property, etc., and that a buyer may not be held accountable unless that constructive notice is provided. It's much like a lien, a new owner is NOT obligated for lien claims incurred by the prior owner of the property unless they are RECORDED or are Statutory in nature such as real estate taxes. Imagine if the seller went out and borrowed tons of money from 3 or 4 lenders just before he sold to you, and none of those lenders bothered to record their liens. Tough ... they are out of luck. If that wasn't the case why would anyone in their right mind buy a property if they can't verify liens, encumbrances and adverse claims before concluding the purchase?

With respect to renewal options and dollar amounts, it's kind of silly to speculate what you can or can't do ... or ask people here what your options are. If the lease is worth duck snot it will very specifically call out the renewal terms, conditions and prices. If it doesn't, you most likely are free to do whatever you wish.

Now for my best advice ... do not take advice from me or people like me on line. That's why you need an attorney. I must admit it concerns me a little to see that the attorney was "studying up on it a little". Yikes.
Good luck.

Oh, and no ... I'm not an attorney but I stayed at a Holiday Inn Express not too long ago.

Leases in mississippi are very rarely, if ever, recorded. Transaction prices are not even disclosed on actual sales because it is a non disclosure state. Most leases have language stating lease runs with lessor's assigns, meaning you if you purchased the building. Some will have opt out clauses, but i would say your stuck with them till december. Is the contract rent stated for the renewal? Some will say that will be negotiated come renewal time and others will have that spelled out from the get go. If its negotiable then ask something ridiculous and they should vacate.

[pstone]

You are pretty much stuck with them till dec, unless you can get them to agree to leave. A contract can be voided if both parties agree. Might give them a few months rent free to get them to leave early...might work?

[Hambone]

Some of the advice given in response to the original question is right on target. But some of the rest is a clear illustration of why you should seek competent legal advice rather than internet "guidance". Read the lease. Unless it allows termination upon sale, you're stuck with the same terms as were in effect between lessor and lessee.

[Faithful Retrievers]

I have a court date scheduled and I will be printing off this thread for my evidence. Thanks for your help.

You must be crazy if you think I am taking legal advice here, but I knew that I could find someone here that had dealt with it or deals with commercial real estate. I was really venting cause I knew it looks like I am screwed if I want this property for my personal use. I am not giving up, an I am meeting with an attorney tomorrow. Best case is if I can break the renewal option with a purchase of the property or jack the rent.

[Hambone]

You must be crazy if you think I am taking legal advice here

No, that was not my implication. You already said you had a lawyer, so I figured you were just fishing for comments. I hope you find a way out of your lease.