The buyer closed escrow on a single-family residence that was leased to a tenant. Upon closing, the tenant refused to vacate the premises insisting instead that the buyer was obligated to honor the seven months remaining on the lease term.
Was the tenancy terminated upon the sale of the property to the buyer?
A buyer acquires title subject to tenants in possession. Neal v Hunt, 112 Ariz. 307, 541 P. 2d 559(1975); See also Martinesi vs. Tidmore, 158 Ariz. 53, 760 P. 2d 1102, (App. 1988). (Purchaser of real property takes title “subject to” existing option agreement.) In other words, a tenancy is not terminated in connection with a traditional sale of real property. The buyer is therefore legally obligated to honor the lease as written. Here, provided that the tenant meets his/her obligations under the lease, the tenant is entitled to occupy property for the seven months remaining on the lease term.