Legal Question in Real Estate Law in California
property improvement compensation
Do we have a recourse for getting compensated for improvements that we made to warehouse space that we rent, before the owner sells it?
1 Answer from Attorneys
Re: property improvement compensation
Maybe, but probably not.
First, "leasehold improvements" generally become part of the realty and thus inure to the owner at the end of the lease. There is a rather narrow exception for "trade fixtures," a term that includes things installed by a tenant in order to ply a certain trade. Trade fixtures must be removable without serious consequences for the structure itself and must be removed prior to the end of the lease.
Unless stated in the lease, the landlord need not compensate a tenant for improvements made by the tenant.
Keep in mind that the sale of a leased building does not ordinarily terminate (or otherwise affect) the tenancy. Unless the lease specifically provides for termination upon sale of the building, the new owner steps into the old owner's shoes with respect to existing tenants, taking ownership "subject to" the lease(s).