If a landlord sells his residential or commercial building, is a tenant required to move out or sign a new lease with the new owner?
I’ve seen this situation in both the residential and commercial context. A commercial tenant contacted me about some landlord tenant questions and then decided to handle the matter herself. I heard from her again a month or so later and she had some issues with the new lease. The property manager was not returning her calls and she had not paid rent for the first month under the new lease. She wanted to resolve her issues with the new lease before paying rent. As I dug deeper into the situation, I learned for the first time that she had signed an agreement terminating her old lease and waiving any claims against the new landlord:
Release of Parties. Upon the execution of this Agreement: (a) Tenant releases and discharges Landlord from all claims, demands, damages, liability, and causes of action that Tenant has or may have against Landlord arising out of or in any way related to the Premises or the Lease and (b) Landlord releases and discharges Tenant from all claims, demands, damages, liability, and causes of action that Landlord has or may have against Tenant arising out of or in any way related to the Premises or the Lease.
The tenant had a $1200 security deposit with the former landlord and wanted an accounting of that by the new landlord. I read the above provision in the Lease Termination Agreement and told her that she had waived any claim for the security deposit against her new landlord when she signed that agreement. I also told her, by the way, just because the building was sold does not mean that you had to sign a new lease with the new owner. The new owner generally takes the premises subject to any existing leases. So if the tenant still has several months on an old lease, the new owner has to honor the old lease, the monthly rental rate, the security deposit, and all the other terms of the original lease.
Whether you are a tenant in a residential or commercial building, the sale of the building does not require you to move out or sign a new lease. The only exception would be is if your lease has an early lease termination clause that the original owner can exercise.