How to Do a Change of Lessor on a Lease of Real Property

Written notice of a change in lessor is important.

When you purchase rental property, either commercial or residential, you must give consideration to notifying the tenants of the change in lessor. All written lease agreements will require such notice to be given in writing and most state laws require significant changes in the terms of a tenancy, such as a change in lessor, to be in writing. Moreover, you will want your tenants to have the new contact information so the rent checks are properly delivered and important information is conveyed in a timely manner.

Things You'll Need

• Tenant list of current occupants
• Tenant leases

Instructions

1. Obtain a list of all tenants currently occupying the units from the current lessor along with the lease agreement for each unit and any amendments to any of the leases. Compare the list with the signers on each lease, as well as the signers of any guaranty of a lease, even though the guarantor may not be occupying a unit (which can be common in commercial leases). For each unit, make an accurate list of all persons or companies that either occupy the unit or have signed the lease or guaranteed for the lease.

2. Review the leases regarding the requirement for notification of changes in the lease. In most cases, all leases will be in a standard form with the notice requirements the same for each; however, it is important to identify any differences among the leases so that you adequately comply with the specific notice requirement for each lease. An important point to note regarding the notice requirements is whether mailing the notice is necessary for it to be effective and whether the notice may even require a certified mailing. Also note whether any of the leases require notice be sent to another address in addition to the unit--which is typical if there is a guarantor for the lease.

3. Prepare a standard notice for all tenants giving notice of the change in lessors. The notice can be in letter form and should provide the tenants with the essential information regarding the change in lessors, such as your name and contact information. The notice should also indicate the effective date of the change and specifically state where to deliver future rent checks. Make sure the notice for each unit is addressed to all current tenants--anyone who signed the lease and any guarantor for the lease. Both you and the former lessor should sign each notice. Keep a copy of each notice for your records.

4. Send the notice to the tenants as specified in the lease. If mailing is required, you should also consider hand delivering a copy of the notice to each unit and preparing a general notice of the change in lessors suitable for posting in a common area.

Tips & Warnings

• If you purchase commercial property where any of your tenants are government agencies, check with the agency regarding the use of a mandatory form to give notice that you are the new lessor. For example, the State of Oklahoma has specific notice and form requirements for changing lessors on property it leases. Failure to comply with these requirements will mean the rent checks will continue to be sent to the old lessor.

• In some states, such as California, a tenant's lease rights can be terminated on 60 days notice if the lessor loses the property through foreclosure. However, if you signed your lease before the mortgage or deed of trust subject of the foreclosure was recorded, you may be able to prevent your lease from being set aside due to the foreclosure. You should consult with an attorney in this situation.

References

• State of Oklahoma: Notice of Change of Lessor Instructions
• California Code of Civil Procedure 1161b(a)