Must a new property owner new owner honor a lease?

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Must a new property owner new owner honor a lease?

This question regards a mining contract between a landowner and a stone company. The stone company got the landowner to sign a lease stating that they had the right to mine bluestone on his property and he would get a percentage of the value of the stone they removed. They have done nothing on the property for a year and a half and the lease was for 3 years (in about 20 months). The property has recently been sold. There is the clause that the agreement shall be binding to heirs, successors and assigns.

Asked on April 7, 2017 under Real Estate Law, Pennsylvania

Answers:

M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

If a property is sold, that has no bearing on the validity of an existing lease. In other words, the property was sold "subject to" the lease and accordingly the new owner must honor it.

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

Yes, the new property owner must honor the lease. The old owner can only sell what he had--that is, he can only convey the rights he had. What he had was a property encumbered by a lease, where the lease gave certain rights to another person (the stone company)--he could only sell you that (a property with a lease on it) since that's what he had to sell. The new owner buys the property subject to the lease and must honor it.


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