When the ownership of a leased property is transferred, an issue arises concerning the fate of the existing lease agreement. This is a matter requiring particular attention, so that the tenant does not face unpleasant surprises.
Initially, the tenant’s rights arising from the lease relationship may be asserted only against the lessor with whom the lease contract was concluded. For this reason, the Civil Code provides that in the event the ownership of the leased property is transferred for any reason (sale, donation, inheritance, etc.), the lease relationship does not automatically terminate, but the new owner of the property has the right to terminate the lease agreement, regardless of whether the lease was agreed for a fixed or indefinite term.
An exception to this provision is introduced by Article 615 of the Code, which states the following:
“In a lease of property proven by a document of certain date, if during the lease the lessor transfers the ownership of the leased property to a third party or grants another real right that excludes the tenant’s use, the new acquirer enters into the rights and obligations of the lease, unless otherwise agreed in the lease document. If the real right granted by the lessor to the third party does not exclude the tenant’s use, the third party has an obligation not to obstruct it.”
Therefore, it suffices that there is a lease document of certain date in order for the tenant to be able to assert their rights arising from the lease against the new acquirer of the property.
A special provision has now been introduced in the Code of Civil Procedure regarding the case where the new acquirer obtains the property by auction. In this case, according to Article 1009 of the CCP, the following applies:
“If the auctioned property was leased for business purposes, the highest bidder has the right to terminate the lease, which terminates six (6) months after the termination notice. If the auctioned property was leased as a residence, the highest bidder has the right to terminate the lease, which terminates six (6) months after the termination notice.”
Therefore, the tenant should be particularly careful already when drafting the lease agreement in order to be adequately protected in the — quite common — case of change of ownership of the leased property during the lease term.
