Selling vacation rental property, what happens to future bookings?
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Selling vacation rental property, what happens to future bookings?
We have several bookings that will take place
after closing. The buyer does not wish to continue
renting out the property in the future, but would
probably be ok with these couple renters. However,
the buyer’s concern is that they may start
renovations before that time. We are buying a
different, comparable property, but may be in the
same situation, renovating during those booking
times.
The rental agreement does not say anything about
cancellation by the landlord. What are our options
here?
Asked on May 28, 2019 under Real Estate Law, Ohio
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 4 years ago | Contributor
Any bookings made already remain in place and must be honored by the new owner: if the new owner does not, he or she could be sued by the vacationers for "breach of contract." The legal theory is this: you can only sell what you have. If you have entered into contracts for future rentals or bookings, what you have is a property where other people have an enforceable contractual right to stay there at some time(s) in the future. Therefore, what you have to sell is a property where the owner's rights over the property (e.g to do whatever he or she wants to do with it) are limited by the agreements to rent which he or she has already entered into.
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