Can My Commercial Lease Be Voided if the Property Is Sold?

Can My Commercial Lease Be Voided if the Property Is Sold?When a commercial building is sold, tenants generally have rights that protect them from eviction. Typically, selling the property does not justify evicting a tenant. Here’s what to expect if you are a tenant in a building that changes ownership.

Lease Agreements

The new owner is generally required to honor existing leases. If the property is sold with nine months left on a one-year lease, the tenant has the right to occupy the unit for the remaining nine months. The new owner assumes responsibility for the lease, including collecting rent and adhering to its terms until the lease expires. When the lease expires, the new owner may ask the tenant to vacate so they can take possession or repurpose the property. The sale of the property does not affect the tenant’s claim to their security deposit.

Shorter Leases

Tenants with month-to-month leases have fewer rights compared to those with longer leases. The new owner can terminate a month-to-month lease at their discretion, but they must provide appropriate notice, typically 30 days. Landlords cannot use self-help measures, such as turning off utilities or changing locks, to evict tenants.

Suitable Notice

Tenants are entitled to “fair notice” before a realtor shows the property. In California, landlords cannot enter a rental property without the tenant’s consent under the “right of possession” law. California law requires a minimum of 24 hours’ notice. The owner must make a reasonable effort to notify the tenant, but the notice does not need to be in writing as long as the tenant has been informed of the intent to sell within the previous four months.

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