What happens to existing leases when a property is sold?

When a property is sold, existing leases typically remain in effect. This principle stems from the legal concept of "assignability" in leases, which means that the new owner of a property takes on the rights and obligations under any existing lease agreements. As a result, tenants are usually protected under their lease agreements, and their rights to occupy the property continue as agreed upon in the lease terms, despite the change in ownership.

The validity of existing leases is a crucial aspect of real estate transactions because it ensures that tenants are not abruptly displaced without notice or due process simply because a sale has occurred. The new owner inherits the responsibilities to honor the terms of the lease, which may include respecting rent, maintenance obligations, and other terms set forth in the agreement.

In this scenario, the other options are not applicable because they do not align with standard real estate practices. Leases are not voided upon sale, they do not automatically convert to month-to-month tenancies, nor do they require renegotiation unless mutually agreed upon by both parties. This continuity provides stability for tenants and reinforces the legal protections afforded to them.