Final answer:
The lease generally continues under the same terms when real estate is sold, as it is a binding agreement that the new owner must honor. Specific outcomes depend on the lease terms and local laws, and both tenants and new owners should review the lease and understand their rights.
Step-by-step explanation:
When real estate under an estate for years is sold, the lease typically remains in effect under the same terms, as leases are binding legal contracts. This situation is governed by a principle called 'assignment of lease,' which allows the new owner to step into the shoes of the previous landlord. The new owner would need to honor the current lease's terms until its expiration. However, the specific outcome can also depend on the lease terms and local laws.
If the lease termination conditions are met as specified in the agreement, such as a month-to-month lease where a 30-day written notice of intention to terminate is provided by either party, the lease can be ended accordingly. It's also possible that if the sale of the property somehow renders it unfit for tenant occupancy, or if the new owner and tenant come to a mutual agreement, the lease might be terminated earlier.
Lease agreements usually contain a clause explaining what will happen in the event of a sale, so reviewing the lease document is crucial to understand the specific rights and obligations. If the lease holds a termination clause that involves property sale, this could also impact what happens to the lease post-sale.