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Buying an apartment with a tenant

Buying a property and find out there is a tenant in the apartment? And then what are your obligations to the tenant? How to deal with such a situation is explained in today’s article.

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4 minutes of reading

Chapters of the article

What happens when you transfer a house or flat with a tenant

According to the Civil Code, in general (not only for real estate), if the owner of the property changes (e.g. on the basis of a purchase agreement), the rights and obligations under the lease are transferred to the new owner. This means that even if the new owner or prospective buyer does not care, the rent will continue to be paid and, very importantly, under exactly the same conditions as the previous owner. The only change in the tenancy relationship will be that the new owner will become the landlord (automatically).

How to resolve a problem with a tenant before buying a flat

Before you buy , it is wise to find out whether there is a tenant in the flat and, if applicable, whether they have a fixed-term or an open-ended contract.

If the prospective buyer has a problem with the tenant, it is possible to agree with the seller in advance that the lease will be terminated (either the seller agrees with the tenant, or the lease is allowed to expire, or the seller gives notice to the tenant – whichever is possible). In such a situation, it is important to get at least a written confirmation(notice, agreement).

It is also possible to “hedge” against the lease in the purchase agreement itself. For example, the seller can declare in the contract that the apartment is not encumbered by any lease or similar legal relationship. In case such a declaration proves to be false, it is possible to negotiate a contractual penalty or to include in the contract the buyer’s option to withdrawfrom the contract in such a case.

Real Estate Purchase or Sale

We provide a complete package of legal services related to real estate sales and purchases, including reservation contracts and escrow services. We will also help you with all tax and land registry issues. Our work is fast and accurate, ensuring a worry-free transaction. You’re also welcome to pay after services are provided.

Tip: People interested in buying an apartment often rely only on the information given to them by the real estate agency or the property owner. However, neither the seller nor the real estate agent is often interested in sharing certain information with the potential buyer, so the buyer should request or verify it himself. What to look for when getting information and what are some practical tips for buying that you often won’t find in the contract?

When the tenant does not address in advance

In this case, the transfer of the apartment will be accompanied by the “transfer” of the tenant. At the same time, specifically for flats, if the flat in which the tenant lives has been rented, the landlord (even if the new owner of the flat) has no right to terminate such a lease on the grounds that there has been a change of ownership. Even if such a clause is expressly written in the lease or other contract, the Civil Code provides that such a clause will not be taken into account at all (i.e. as if it were not there at all, thus not applicable).

If the apartment in which the tenant lives has been rented, the landlord (even if the new owner of the apartment) does not have the right to terminate the lease on the grounds that the ownership has changed

The good news for the new owner is that he is (but only partially) protected by the Civil Code. The new owner is not bound by provisions in the lease agreement about the landlord’s (i.e., the new owner’s) obligations that go beyond the law. However, this does not apply if the new owner was aware of these arrangements (e.g. a copy of the lease was presented or preferably sent to him before the purchase was concluded).

If the property is transferred including the tenant, any changes to the lease agreement must be negotiated by the purchaser as the new owner. This means, for example, to enter into amendments to the contract (especially if the contract can only be amended in the form of numbered amendments to the contract signed by both parties according to its wording) and to change the rights and obligations in the contract (e.g. rent, rent increases, etc.). The same then applies to the termination of the lease – the new owner has to arrange this and is limited in this by the grounds for termination and the terms (and conditions in general) that are in the lease agreement, even though it was concluded by the previous owner, and by the Civil Code for the reasons that are given by law.

Tip: You are buying a flat and you can’t wait for your new home, but the joy is suddenly spoiled by the mention of foreclosure… Is it better to stay away from such a purchase, or is it not as bad as it seems at first glance? In today’s article, we will tell you how to proceed and what to watch out for. This is what we focus on in our article.

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Author of the article

JUDr. Ondřej Preuss, Ph.D.

Ondřej is the attorney who came up with the idea of providing legal services online. He's been earning his living through legal services for more than 10 years. He especially likes to help clients who may have given up hope in solving their legal issues at work, for example with real estate transfers or copyright licenses.

Education
  • Law, Ph.D, Pf UK in Prague
  • Law, L’université Nancy-II, Nancy
  • Law, Master’s degree (Mgr.), Pf UK in Prague
  • International Territorial Studies (Bc.), FSV UK in Prague

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