LESSEE’S RIGHTS IN CASE OF CHANGE OF OWNER
Question: Sir, I have rented a house with a ten-year lease term, for business purposes. But after renting for 1 year, the landlord sells the house and I can't rent anymore. Is there a breach of the Contract? The Contract is no provision that the landlord can’t transfer the land use right during the rental period. Can I continue to rent that house or demand compensation if I can't continue renting?
DTD Consulting: Thank you for your trust and sending your questions to DTD. With the information you have sent, DTD advises as follows:
1. Legal basis
- Civil Code 2015
- Civil Procedure Code 2015
- Law on housing 2014
2. Consulting content
(i) Can the homeowner transfer ownership of the house while there is a lease contract?
Article 127 the Law on housing 2014 on selling houses under lease agreements
“In case a homeowner buys a house under a lease agreement, he/she must notify the lessees in writing of the sale and requirements for sale; if the lessees have paid off the rents up to the date on which the notification is sent, they shall acquire pre-emption rights to buy the house, except for jointly-owned houses; if the house is not bought by any lessee within 30 days from the date of which the lessees receive the notification, the homeowner is entitled to sell the house to other people, unless both contracting parties otherwise agreed about the deadline.”
Thus, in your case, when the lease contract has not expired but the owner wants to sell the house being rented, they must notify the lessee in writing and the lessee has priority to buy if the rent has been paid in full. After 30 days from the date the lessee receives the notice but does not buy, the homeowner is entitled to sell that house to another person.
(ii) Can the lessee continue to rent the house after transferring ownership?
Clause 2 Article 133 the Law on housing 2014 on Rights to continue renting houses:
“If the homeowner transfers ownership of the house under lease agreement to other people but the lease term has not expired, the lessee has right to continue renting for the rest of their lease term; the new homeowner must keep performing the lease agreement, unless otherwise agreed.”
Thus, in your case, the homeowner (the lessor) sells the house, the new homeowner (the buyer) must continue to perform the lease contract that has been previously signed.
(iii) In case the new homeowner does not agree to let the lessee continue to rent as the house lease contract signed before, does the lessee have the right to demand compensation for any damage and fines against violations?
As analyzed above, the new homeowner is responsible for continuing to perform the previously signed housing lease contract. Therefore, if the lessee still wants to rent but the new homeowner does not agree to let the lessee continue to rent as the house lease contract signed before, the lessee can file a lawsuit with the competent People's Courts for settlement.
Besides, in the event that the lessor does not notify you at least 30 days before the date of sale of the house about the sale of the house, the conditions for the sale of the house, based on the signed rental contract, you have the right to request compensate for damage (when there are proven grounds) and request the lessor to pay you a fine for violation (if the Tenancy Contract stipulates it). In case the lessor fails to comply with the agreements and commitments in the signed Tenancy Contract, you can also file a lawsuit to the competent People's Court to request settlement.
To facilitate further consultation, the Client can contact DTD's legal team directly. Thank you!
