If you occupy a building that’s been sold, be aware of the following changes.
When your building sells to a new owner, an immediate change that can happen is that you will have a new property manager. If this happens you’ll be notified of the change of address under the notices provision of your lease. All rent payments and correspondence will need to go to the new landlord or landlord agent. However, your lease terms do not change under new ownership. 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 landlord/seller fills out the agreement incorrectly it can be detrimental to you, the tenant. For instance, if the seller records a wrong amount for your security deposit, you have no recourse for the seller to return the deposit when you move out once the building sells. The buyer would normally be responsible for the return of the deposit. However, if you signed an incorrect estoppel the buyer can refer to it and point out the fact you agreed to the incorrect amount for 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 you to address any issues that may exist in the building or with the landlord.
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 314-821-0085 or send an introductory email to firstname.lastname@example.org