CAN A LEASE BE TERMINATED WHEN THE PROPERTY IS SOLD?

lease termination

Can a lease be terminated when the property is sold?

The lawyer, Ivan Dario Daze, from Jaramillo Vargas Avocados, explained to us in an interview with Metrocuadrado.com what happens when properties are sold and they are leased, whether they are intended for housing or commercial.

The first thing to differentiate is that in our legal system there are two types of leasing contracts regarding property, such as housing, regulated by Law 820 of 2003 and commerce, regulated by the Civil Code and articles 518 to 524 of the Commercial Code.

Regarding, if it is possible to terminate a lease for the sale of a property, we must review what type of lease we are in. “For housing lease contracts, literal c of numeral 8 of article 22 allows us to request the termination of the contract at its expiration, when we must deliver it in compliance with obligations originated in a contract of sale without any type of compensation, then, it is only enough to inform three months in advance of the expiration of the contract, “said Daze.

According to the lawyer, something different happens with contracts in trade, considering that Article 58 of the Commercial Code does not bring immersed termination of the lease agreement for the sale of the property, but, causal brings completely different, such as (I) non-compliance, (ii) the owner needs the property for his own room or establishment and (iii) when repairs or new works must be made.

In these cases, it is advisable to seek the termination of the contract jointly with the tenant and thus avoid breaches at the time of sale of the property.

On the other hand, it is not necessary to agree in any part of the lease on an eventual termination due to the cause of the sale, because for that it is already determined in our legal system.

Daze explains that, in the eventual case that we need the property immediately to comply with a sale contract, it is best to compensate the tenant in order to deliver the property in a harmonious way or, the new owner could continue with the lease agreement being a new landlord.