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Richard, Attorney
Category: Legal
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Experience:  Attorney with 29 years of experience.
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We are about to buy an office building. The seller signed a lease agreement with hair salo

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We are about to buy an office building. The seller signed a lease agreement with hair salon & optometrist till 2014 for $6 per Sq foot. The minimum market value is $12 per sq foot.
Now as we are becoming the new owners , is there anyway we can give them a plenty of notice for the tenant to leave or to increase the rent to be close to the market value or we are obligated to honor the previous owner contract
Submitted: 4 years ago.
Category: Legal
Expert:  Richard replied 4 years ago.

Good evening. Unfortunately, you are obligated to honor the existing lease. The thing is though that you should have factored this below market lease into the pricing of the building. If you capitalized the below market rent, you actually come out way ahead because you are using your multiple on a much lower income number.


Good evening. If the auction takes place and you don't leave, the law does not allow the new owner to forcibly evict you without obtaining an eviction order from a court. What that means is that if the sale date comes and you don't move out, the new owner cannot simply change the locks or throw your things out. Rather, what the new owner has to do is to first deliver a 5-Day Notice to Quit...which basically says you have 5 days to leave or face eviction. But, if you still haven't left, the new owner must then file a petition with the court for an eviction order. Depending upon the court's docket, it can take anywhere from about 15 days to a couple of months to get a hearing. Only when a judge has issued the eviction order can the new owner have you evicted. That will buy you a good bit of time.



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