Notifying Existing Commercial Tenants of Ownership Change

General Landlording & Rental Properties
5yFollow

Notifying Existing Commercial Tenants of Ownership Change

John Hunter
Investor · Marion, IL · Member since 2019 · 7 posts · 0 votes

Newbie Commercial Landlord Question!

Closing on a commercial property in Illinois later this week with a strong tenant already in place with a lease signed thru 2027. To anyone with experience acquiring properties with existing tenants (who you strongly desire to keep!), how did you inform them of the change in ownership? Is there a legal process that needs followed? Would a simple letter explaining the ownership change suffice? In-person conversation? 

Thanks in advance!

0Reply
30 views

3 Replies

Jump to latestLatest
  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    5y

    I'm not aware of any "legal" process, but you should definitely let them know of the change in writing. I send a letter that states when the change of ownership is in effect, how they can contact me, report maintenance, pay rent, etc. I also remind them that the terms and conditions of their existing lease do not change; only ownership has changed.

    If this is a larger commercial property with a national company as the renter, then you may want to consider involving an attorney just to cover any legal issues. You don't want to have problems and then get slammed by a team of Best Buy attorneys ripping you apart.

    The DIY Landlord Book4.7247 Reviews
    WebsiteView Page
    3Reply
  • John Hunter
    OP
    Investor · Marion, IL · Member since 2019 · 7 posts · 0 votes
    5y

    Great points, Nathan! Do you send a letter prior to closing, or do you wait until the sale has gone through? 

    0Reply
  • Dylan Shea
    Member since 2018 · 32 posts · 12 votes
    5y
    John - what does the lease say? That almost always gives the details of the notice requirements, and if there are any issues with change of landlord interests. Usually, unless the Tenant is involved in the transaction some how, then as part of the post-closing process, the notice is mailed out in accordance with the notice provisions of the lease.
    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free