Legal Question in Real Estate Law in California

Re: landlord terminating lease agreement

This can't be handled with a form. You and the buyer are stuck with the tenants until the lease expires, unless of course, the tenant breaches the lease, giving you or the new owner a reason to begin an eviction. Sale of a leased property merely gives the tenant a different landlord. It does not end the lease or affect the tenant's rights in any way. Further, if you are holding a deposit from the tenant, you must refund the deposit (and the new landlord can collect a nre deposit), or alternately you can give the deposit funds to the new landlord and he or she in turn must give the tenant written acknowledgment of that.

In rare cases, a lease will contain a termination-upon-sale clause, which if present would produce a different result, but this is certainly unusual.

In a foreclosure sale, the result is different; if the lease is junior to the foreclosed lien, the tenant loses its lease but has a claim against the foreclosed former landlord for money damages.

Re: landlord terminating lease agreement

The buyer would take the property subject to the lease. You might want to obtain an estoppel certificate from the tenant and set out all terms of the lease, and provide that to the buyer so that you and your tenant are protected by disclosure.

If the buyer wants the tenant out, you probably would have to negotiate with the tenant how much it would take to buy out the rest of the lease.