By Robert Griswold
Question: Prior to signing a one-year lease, we asked the agent and the owner if the owner had any intentions of selling the property, and expressed our intent to want to stay in the rental home for a long time. The response was the owner had no plans to sell the home. Two months later, the agent put the home up for sale. Are we obligated to stay in the lease, or can we break it since we were misled? We are now at the mercy of the owner. If he sells the property prior to the expiration of the lease, must we move? What are our options and obligations?Tenants' attorney Kellman replies:
It is unfortunate that you may have been misled about the intended sale. The owner will claim that he changed his mind about selling right after the lease was signed. What a surprise! Some owners will lease a home during a sale to keep money rolling in, while others prefer the home vacant to affect a quicker sale. Normally, a home can be shown only upon proper notice, during normal business hours, and the showings cannot be excessive. Of course, it is better to be up front about it so that the issues about showing the place can be handled before it becomes a problem.
You have a one-year lease for that property. Unless the lease has a termination provision upon sale, you have the right to live there for that year whether the home is sold or not. Generally, owners do not have to inform tenants about possible intentions to sell in the future. I think an owner should, however, disclose if the home was already sold and waiting the close of escrow. It may be difficult to break the lease due to the sale if no one disturbs you during the lease period. It could be different if there are many buyers coming over to see the place. If so, you could seek to break the lease based on a misrepresentation and the harm suffered due to the disturbance of your peace. If you had been informed of an intended sale so soon into the lease period, you probably would not have leased the home or you may have required a different type of lease. Seek legal counsel to protect your rights before you take any action on that lease.
Landlords' attorney Smith replies:
Not so fast, Steve. You would have readers believe that landlords by nature are inherently greedy and enjoy misleading their tenants just for a lark. As the landlord's attorney, I do not share Mr. Kellman's point of view in this case. It is plausible that the landlord did not intend to mislead the resident but was well intentioned when executing the one-year lease. Later, the landlord determined to sell the property because his/her personal situation changed. Nothing in the lease legally prohibits the landlord from selling the property. With or without the sale, the lease carries through for the one-year term. The buyer will have to honor the lease with the tenant until the lease expires.
I further believe that Mr. Kellman's client is going to have a tough time convincing the court that the sale by itself constitutes a breach of the lease's quiet enjoyment provisions so as to justify a termination. Of course, it is always possible for the tenant to approach the seller or buyer to negotiate an agreement that would terminate the lease and the resident would then have no further responsibility. If the buyer bought the property to be owner-occupied, he or she might welcome the lease-break opportunity. Otherwise, the lease stands on its own and all parties will be legally required to recognize it after the sale closes.
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