Legal Question in Real Estate Law in California

Re: Commercial Lease Transfer of Property

Probably not. Leases are traditionally interests in the real estate, even if not recorded, and take priority over the possessory claims of a new owner of the fee.

Large commercial properties are bought and sold all the time by real estate investment trusts, wealthy investors, Wall Street listed property investment companies, and investors of all sizes and kinds. They buy them for cash flow, and love it when the buildings they buy are full of good long-term tenants producing stable income.

If you or I bought the Bank of America Building or the Sears Tower, we would want and expect the tenants to stay in place and keep paying that rent! The law supports that vision.

Unless your lease specifically states that it terminates upon a change of ownership, a sale of the building will just result in your having a different landlord. The new landlord has no more right to toss you out or abbreviate the (properly-documented) terms of your rental than the old landlord would have had. The ownership change does not diminish your rights as a tenant.

If you have handshake deals or other wink-wink stuff with the seller, or course, thenew guy isn't going to know about that nor will he have to honor it.

Re: Commercial Lease Transfer of Property

I am posting just to note that I agree completely with Mr. Whipple's analysis, and his view that landlords want the tenants in the building. They are what makes commercial real estate valuable. The only time a tenant need worry is when a new owner wants the place for himself, and the lease will expire.

Very truly yours,