Is a verbal lease contract with previous property owner of a property still valid after foreclosure? Is the new owner obligated?

Asked over 1 year ago - Duluth, GA

We purchased a foreclosed office building directly from the bank in Georgia. The tenant from the previous owner, that is, the owner before the property was foreclosed, is still occupying the space. He claims that he had a verbal lease contract with the previous owner of the property for an indefinite period with a very low rent price. What would be the obligation of the new owner in this situation? There is no written contract with him and the previous owner, nor is there any contract with us. How do we get him out of the building?

Attorney answers (3)

  1. Scott Benjamin Riddle

    Contributor Level 20


    Lawyers agree


    Answered . You get him out by following the law, to the letter, concerning notice and the filing of a commercial dispossessory. Assuming you have never done one, it is well worth a relatively small amount to have a lawyer who regularly handles these cases. They can do it quickly and easily. Since doing it wrong could mean 2-3 more months of free rent, it'll pay for itself.

  2. Kevin M. Veler

    Contributor Level 15


    Lawyers agree


    Answered . As indicated, the safest course is to follow the letter of the law and treat them as a month-to-month tenant and to terminate the lease in accordance with the law. There may be other issues to discuss such as fixtures and items to remove. As a practical matter, if the tenant has been paying rent in a timely manner and is otherwise a good tenant, you may want to seek a written lease for a higher rent (which may not be 100% of market) which may save you costs and save them relocation and other costs. This is one of those situations where you would likely be wise to have legal counsel. If I can be of any help, please contact me.

    Disclosure: This answer and any information contained in this answer is not intended to be treated as legal... more
  3. Frank A. Natoli


    Contributor Level 20


    Lawyer agrees


    Answered . I agree with my colleague. There are not such things as a verbal lease. What happens is that it is treated as a default month-to-month if not in writing. The Statute of Frauds requires certain contracts, such as those concerning property, to be in writing.

    As noted, just follow legal procedure to get him out and you should not have any problems.

    I too would suggest hiring a lawyer to handle it for you.

    Good luck!

    The law firm of Natoli-Lapin, LLC (Home of Lantern Legal Services) offers our flat-rate legal services in the... more

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Property foreclosure

If you miss too many mortgage payments, your lender can start foreclosure proceedings to take ownership of the property, but it has to follow your state's laws.

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