Expert: Hans Weber, Licensed Broker Associate - 7/1/2004

Question
My parents just recently bought a house and closed on it the end of May '04.  Before closing we knew that the property included a lease with a current tennant in a morton building (approx. value: $50,000) for a farmer to store his farm equiptment or anything he wants, but didn't know he had it for up to 10 years longer by renewing each year. We do not have the option to terminate the lease. The lease was made between the current tennant and the previous owner of the house and the lease gets inherited to the new owners of the house (us) and we're obligated and binded to the terms of the lease. We do not want the lease at all. We do not have access to the building at all for the time the tennant is leasing the building, which might be up to 10 years. The lease also says the tennant is only to pay $100/year to the house owner's for the use of the $50,000 building which is ricoculous. The property came with 10 acres of land and that building is on the land. We paid for that building because it was included in the price of the house and we are paying taxes on the building and that land. We were working with an attorney and tried to get rid of the lease before closing, but that was not possible.  How would it be possible to terminate the lease and get full ownership of the building?  Thanks, Tim

Answer
Hi Tim,

Thanks for your question.

Yes, the lease is part of the property sold.  Did you not know the terms of the lease when you bought the property?  The lease would effect the value of the property, obviously if the lease were paying $10,000 a year you might be happy, but not for $100 a year.  You have to abide by the terms of the lease.  
Your only option is to try to negotiate to buy out the lease with the tenant.  Offer him a price to terminate the lease early  and pay to move him somewhere else.

Think that would work?
Hans