Can I leave a commercial lease if the property has been sold?
Get Legal Help Today
Compare Quotes From Top Companies and Save
Secured with SHA-256 Encryption
Can I leave a commercial lease if the property has been sold?
I am in a year-to-year lease (for 3 years and am in the third year). The building in which I have an office has been foreclosed on and the bank assumed the payments. The bank recently sold the office building to a realtor last month. I have not used my office much in the last 6 months and would love to get out of it if I can. Do I have any legal options for terminating the lease due to the foreclosure and/or sale of the property in which my office is contained?
Asked on January 31, 2011 under Real Estate Law, Virginia
Answers:
M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
I would strongly suggest that you bring your lease to an attorney in your area to review on your behalf. There can be at least two or three different scenarios here and you need to figure out which applies according to your state law. Now, there is a saying that applies as the basic rule for commercial leases in foreclosure: "first in time, first in right." In other words, if the mortgage was recorded before the lease was signed, the general rule is that the lease is wiped out. This allows the new owner of the property to do with it as they please -- typically sell it, lease it to the current occupants or lease it to someone else. The new owner can evict the current tenant (even if the tenant has fully complied with their lease), but typically must get court permission to do so.
But some leases contain what are known as subordination, non-disturbance and attornment clauses. An attornment clause in your lease would mean that you agreed to remain as a tenant with a new landlord. The lease clause would even state what happens to your tenancy in the event of foreclosure. So you may have an out and never forget that the new landlord may want you out anyway so you should explore that option in a subtle manner. Feel out the new owner and have the lease read by an attorney. 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.