Here are some things you need to know if you occupy a building that’s been sold.
An immediate change that may happen is you will have a new property manager. If so you’ll be notified of the change of address under the notices provision of your lease. Going forward all rent payments and correspondence will need to go to the new landlord or landlord agent. However, under new ownership your lease terms do not change. Your lease is a legally binding document until it expires.
Before the sale finalizes you will be asked by your current landlord/seller to sign an estoppel agreement, a certified statement provided by the landlord verifying the terms and conditions of the lease to the buyer. If the seller fills it out incorrectly it may be detrimental to you, the tenant. For instance, if the seller states an incorrect amount for the tenant’s security deposit, the tenant has no recourse to the seller to return the deposit when they move out once the building sells. The buyer normally would be responsible for the return of the deposit but now can refer to the estoppel and point to the fact you agreed to the amount under the security deposit. Make sure your attorney and your broker review the estoppel before you sign and return it to your landlord. Additionally, the estoppel can be a leveraging opportunity for the tenant to address any issues that may exist in the building or with the landlord.
Finally, a couple other things can happen as a result of a property sale. First, if the property sells at a high price, the property appraiser may re-assess the property and real estate taxes may increase. Those increases will be passed through to all the tenants in the building. Second, if you want additional space or it’s getting close to renewal time, be aware that the new buyer may set higher rates.
Consider engaging howardcommercial to walk you through this, as well as to build leverage for your upcoming renewal or possible relocation. Give us a call at 314-821-0045 or send an introductory email to doug@howardcommercial.net
