If a property with a tenant is sold, what can happen to the existing lease?

• A. The lease continues unchanged regardless of sale
• B. The new owner must honor the lease immediately
• C. The lease is voided automatically
• D. The lease may terminate or continue depending on terms of the contract and state laws

Answer: (D)

When a property with a tenant changes hands, the lease is a contract that usually stays in force. The new owner becomes the landlord and must follow the lease terms, unless the lease itself or state law allows ending it for a sale. If the lease has no termination provision tied to a sale and the rent is for a fixed term, the buyer must honor the lease for the remaining period. If it’s a month-to-month arrangement, the new owner can typically terminate with proper notice under state law. Some leases include a sale termination clause, or state law may permit termination under certain conditions, which would allow ending the lease. In short, the lease can continue or be terminated depending on what the contract says and what the applicable laws allow.