Can a Landlord Sell a Commercial Property During a Lease?
Commercial Landlord Responsibilities
In BC, your landlord has several responsibilities, including:
Guarantee your right to quiet enjoyment. “Quiet” refers to the landlord’s assurance against substantial inference with your enjoyment of the premises.
Maintain the premises in a good state of repair and fit for habitation during your tenancy and they must comply with the legal health, safety, and housing standards required. However, you have the responsibility to inquire about the physical and legal fitness of the premise for your lease.
Enforce restrictions on other tenants, such as non-competition clauses.
Can a Landlord Sell a Commercial Property During a Lease?
Yes, your landlord can sell the commercial property you are leasing. The new landlord will inherit you as a tenant for the duration of your lease. Your original landlord must notify you of the property purchase and instruct you to pay future rent to the purchaser.
As a tenant, you will want to ensure any commercial lease longer than 3 years is registered in the Land Title Office before the sale. Otherwise, and although unlikely, the purchaser can take the property without necessarily being subject to your lease (Land Title Act, RSBC 1996, c 250, section 29). If your lease is under three years and you occupy the premises, then you do not need to register it (Land Title Act, section 23(2)(d)).
How Does the Sale Affect the Tenant?
In theory, the sale should not affect your lease. Your landlord should provide the full and complete information to the purchaser about all leases affecting the property, debts/credits, and covenants. For example, the purchaser should receive your deposits or overpayments, if any, and credit those against your account.
Concerning the contract, you should ensure all promises made by your landlord and all rights you hold are recorded in the lease or an addendum.
If they are not, the purchaser may not have to keep them. Unlike residential tenants, commercial tenants hold few statutorily safeguarded rights.
To ensure you and your business are protected in the case of a sale, book a free consultation with us.
