Why you need to notify tenants when the Freehold Owner changes

If the freehold reversion to a commercial property is sold, what are the implications on the new owner if the tenant has not been informed of the change of ownership?

There is no statutory obligation to inform the tenants of a change in landlord in connection with commercial property.  The obligation to inform tenants usually arises out of the terms of the contract between the seller and the buyer.  The contract often provides for the provision and sending of rent authority letters by the seller to the tenants following completion of the sale.

Generally, until a tenant has received notice that the former landlord is no longer entitled to receive the rents and profits under the lease, any claim, notice, request, demand or other instrument which the tenant serves on the former landlord will be deemed served on the new landlord.  Therefore, although there is no obligation to inform the tenants of a commercial property that the reversion has changed hands, the new landlord will want to ensure that this is done so that the tenant is obliged to serve any notices etc. on the new landlord going forward.   As the rent authority letter will then constitute a notice under the Landlord and Tenant Act 1927, it should be served in accordance with section 23(1) of the Act.  

Posted on 9 January, 2019 by Ortolan

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