During a property acquisition, you must obtain a written statement from each tenant stating that the lease reflects the entirety of the agreements made with the seller.
The purchaser or creditor of a building is sometimes reassured to know that a tenant's lease accurately reflects their rights and obligations.
For instance, the new owner of a building prohibits a tenant from using an outdoor space to set up a small terrace café during the summer season. Although a verbal agreement was reached between the tenant and the previous owner, the lease has not been modified to reflect this. It even states that "The Lease constitutes the entire agreement between the parties and no other document or prior or contemporaneous verbal agreement shall be admitted unless such modification is countersigned by the parties."
The Court* confirms that the new owner certainly has the right to complain if their seller did not disclose the additional conditions of the written lease. However, there is nothing preventing two parties from forming "a legal act for the rental of a non-residential space or a thing whose terms will never be recorded in writing." The court concludes that the use of the terrace constitutes "an accessory to the lease obligation", defining the accessory of the leased property as "anything necessary for the tenant's enjoyment to be exercised under conditions that correspond to the nature and destination of the thing leased."
During a property acquisition or financing, should we not, under certain circumstances, obtain a written statement from each tenant stating that the lease reflects the entirety of the agreements made with the landlord.
Why not look beyond reality and the limits of the unknown to discover the true unknown with whom we do business.
*CA 500-09-014273-049, 2004-07-08
