What happens to the personal property in a furnished commercial lease when property goes to foreclosure?

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What happens to the personal property in a furnished commercial lease when property goes to foreclosure?

I signed a three year commercial lease that included the furnishings in the office when rented. The landlord went into default and the property was foreclosed upon prior to the expiration of the lease. What happens to the furnishings that were included in the commercial lease? I have the opportunity to stay in the property through the end of the original lease term.

Asked on December 13, 2011 under Real Estate Law, California

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

Good question. If the commercial property goes into foreclosure and your have leased out the proeprty from the landlord, technically you are entitled to use the furnishings and the lease subject to approval of the new owner of the property so long as you continue to pay the rent to the new owner.

The former owner cannot take the furnishings away until the lease is at an end that you have at the commercial building. You need to be aware that if the trust deed or mortage is senior to your commercial lease, the foreclosure could wipe out the commercial lease where the new owner would not be obligated to allow you to remain as a tenant. I suggest that you consult further with a landlord tenant attorney about your situation.


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