TugCE
Leesburg, Florida
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I am just throwing this out for general ideas. I know that only a Lawyer could answer for sure.
Here is my question. A buddy of mine owns a Tavern and the building and land which he leases is going up for auction as it is in foreclosure. He has or should I say had a Five year lease on the building and property. Now he is saying that his lease should continue even though after the sale.
I would think that at the minimum he will have to sign a new lease but I would think that the new owners could decide not to deal with him.
Hopefully, one of you have had to deal with something like this in the past and as I said I AM NOT LOOKING FOR A LEGAL OPINION JUST PAST EXPERIENCES.
So, what do you think?
Thanks and be Safe,
Tugs
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Dutch_12078
Great Sacandaga Lake, NY
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I know of similar occurrences related to apartment buildings being sold or auctioned, and usually one of the selling points is the number of tenants in place. I suspect the terms of the sale would dictate how current leases are handled, but as you say, only a lawyer could give accurate advice for your buddy's location and situation.
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dave54
Northeast CA.
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Depends on state laws. In most cases a change of ownership does not invalidate existing contracts. Any prospective bidders for the property have an obligation to review all existing contracts on the property and adjust their bids accordingly.
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mowermech
Billings, MT
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IMO, he should get a financing commitment from a lending institution, go to the auction, and buy the property.
Then he will have no leasing problems, and, with luck, the mortgage payments won't be much more than the lease payments!
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Happy_Trails
Fulltime, USA
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It could also depend on how the sale contract is written. When campgrounds are sold that have memberships, sometimes members are allowed to use them for five years, the same way they did. Other times, the contract stipulates that members will no longer be allowed to use the campground, unless they purchase a new contract from the buyer. Usually the contract costs less, than for new members to buy a membership. BOTH have happened, when Western Horizon parks sold some of their parks. In WA Western Horizon lost their right to sell memberships, when they sold campgrounds with contracts that did not allow WA members to use them.
Be Aware if offered a Western Horizon Resort membership, WHR has ALL of their campgrounds up for sale. If members are lucky, they will wind up able to use some of the 12 campgrounds left out of the 23 in the contracts when they are sold. Last I heard, (a few months ago) WHR is NOT telling new members they dont have all campgrounds listed in the contracts...
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Old-Biscuit
Across the USA
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Going up for auction.......foreclosure
All bets are off..........current lease is with current owners not new ownership
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msmith1199
Central, CA
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I'm no lawyer, but I think Old-Biscuit is probably correct. Of course each state may have different laws on this kind of thing. I have heard of businesses having to relocate because somebody bought the property at foreclosure. If your buddy doesn't want to buy the place himself, he should attend the auction and contact the new owner right then. I would think that most people who purchase commercial real estate at auction like that are buying it to lease out. He may be able to ink a new lease deal with the new owner.
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pitch
NY
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Just pulling this out of my It is all a crapshoot without seeing the lease. The new owner or bank may prefer the place staying occupied and continue the lease. If they put him out I would think he would sue his present landlord for the rest of his lease + damages.
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camperforlife
Midwest
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Different states have different laws, but around here a contract is only valid between the people who are designated on the contract. New owners = new contract. Pretty hard to enforce a contract with someone who is no longer in the picture. The new owner could be buying the property to clear it for an entirely different purpose.
If your friend wants to stay, he better buy it himself.
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ETex2
E. Texas
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dave54 wrote:Depends on state laws. In most cases a change of ownership does not invalidate existing contracts. Any prospective bidders for the property have an obligation to review all existing contracts on the property and adjust their bids accordingly.
This.
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