QUESTION
Am i protected as a tenant if I lease a commercial property in foreclosure?
Asked on Feb 25th, 2013 on Foreclosures - Pennsylvania
More details to this question:
Looking to buy a restaurant (just the business) and lease the space. I found out property is under foreclosure. If we sign the lease and include an NSDA clause, are we protected? The owner said that the building is in foreclosure so he can buy out his partner.
1 ANSWER
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Generally, tenants are not protected in a foreclosure. The reason is that there is no privity of contract between the tenant and the new owner. As a practical matter, if the tenant is operating a going concern, it doesn't make sense that the new owner would want the old tenant out. However, it is a valid concern.
Answered on Mar 07th, 2013 at 8:17 AM