Do real estate leases survivethe sale ofa property?
Get Legal Help Today
Compare Quotes From Top Companies and Save
Secured with SHA-256 Encryption
Do real estate leases survivethe sale ofa property?
I want to purchase a condo to rent out. However, the association claims the by-laws require a minimum 1 year owner occupancy before a unit can be rented out (I haven’t verified this in the by-laws yet, but I take their word for it). I want to enter into some sort of option to purchase with the seller, then find a tenant who enters into a lease agreement with the seller (who is still the owner and has met the minimum 1 year occupancy requirement). After the lease agreement is executed, I will close on the property and become the new owner. Does this sound doable? Is it not true that the lease must survive owner transfer so the association has no authority to void the lease, and therefore must allow me to keep the tenant? If so, when is a lease actually executed and enforceable -when it is signed and after any attorney review waiting period or after the person actually moves in?
Asked on October 11, 2011 under Real Estate Law, New Jersey
Answers:
FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
In all states in this country leases concerning a given residential property that were entered into before the close of the property's escrow survive the sale. This is why most real estate that is being rented out for residential purposes have documents known as tenant estoppel certificates signed by the landlord and the tenants before close of escrow to be given to the buyer.
Such documents put the potential new owner on notice about the rental and the price paid per month. Leases to an extent in residential properties even survive foreclosures.
Your plan sounds well thought out in that any restrictions concerning leasing out the unit when there is a new owner would be subject to existing state law requiring the surviving of the lease (if there is a remaining term) post sale.
In most circumstances the lease is valid upon signing of all parties and the term of the lease would begin upon move in date. I recommend that you consult with a real estate attorney before you make any offers on real property about your plan.
Good luck.
IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.