It can be jarring to find out that the owner of the commercial building where you lease space is selling the property. You likely have questions about what this means for your lease agreement and your business.
Property owners should notify their tenants of a sale so they don’t find out from the new owners. However, that’s not always the case – especially if they’re losing the property due to financial issues of their own. The first you may hear of the sale is when an auction sign is posted.
The new owner must honor your lease
The good news is that the new owners can’t just cancel your lease or change the terms of it provided you have favorable lease terms. However, if the terms of your lease allow the owner to raise your rent based on their cost increases on things like property taxes, insurance, management fees or upgrades, you could end up paying more. Keep in mind that the new owners may want to give the place a new look. If they can pass the costs on to the tenants, they will attempt to do so.
What you do next may depend on when your lease is up
If your lease is up soon, you’ll want to find out what kind of changes the new owner plans to make, so you can determine whether to stay or start looking at other properties. If you have some time left on your lease, you may want to meet with your business lawyer and have them negotiate some changes in your favor with the new owner.
That could mean negotiating an earlier end to the lease or some provisions you’d previously sought but hadn’t been able to get from the prior owner. Depending on what the new owner has planned for the property, they may prefer to keep as many tenants as possible – particularly if it has been generating money.
Protect your rights as a commercial tenant
Don’t assume the new owners won’t attempt to make changes that are prohibited by the lease. That’s why it’s essential to know and understand your lease in detail. You need to be able to protect your rights, and you may have to take legal action in order to do so. We help commercial tenants who have disputes with their landlords. Contact us to schedule a consultation.