Real estate is often tricky, and it’s easy to get confused if you don’t have an expert to help you. People need to understand many legal terms, even if they don’t use them daily. They will eventually come in handy. Attornment is an excellent example of that.
Here at Maximum Property Solutions, we focus on offering landlords and property owners a smooth way of going through the legal hassles of leases, repairs, and property maintenance. We made this blog post to help you understand what attornment is and when you will need it.
You will find other blog posts on our website, so check it out now to learn more about real estate. If you are in Windsor, Ontario, we can help you with services such as showing and leasing, preventive maintenance, addressing tenant concerns, and more.
Do you have any questions about what we do? Call us at (519) 969-7159, and let our team help!
What Is Attornment?
In real estate, attornment is the process where tenants acknowledge a new property owner as the landlord. Basically, people in an attornment agreement state they will keep paying rent and following the terms of their original lease relationship. Naturally, they can also change them if they deem it necessary.
This is a breakdown of it:
- You rent an apartment and start living there.
- While you live there, another person buys the place for the owner.
- You want to stay there and keep your lease rights, so you acknowledge the new owner as your landlord.
Although many people attorn to new property owners informally, it’s better if you do it officially to protect your lease rights. You can do this through an attornment agreement.
What is an attornment agreement? Simply a legal document that the tenant and property owner sign to state the new terms of the lease and that they agree to follow them.
Situations Where You Might Need to Attorn
You now know what attornment is, so it’s time to know when you might need it. Here is a list of situations where you may have to attorn lease agreements:
Change in Rental Ownership
The most common example of attornment is when someone renting a residential or commercial property needs to attorn to the new owner of the building. In this case, the tenant will have to agree to that person’s terms for staying in the place.
It’s important to understand that attornment doesn’t only apply to living in a house. Commercial leases may also need you to go through this process. Let’s say that, for example, you work at a store in a mall. If someone buys the building, you will need to discuss the new terms of your stay with the new owner.
Foreclosure on a Property
Foreclosure has many legal implications, and one of them is attornment. However, what is that in the first place?
When we talk about foreclosure, we mean the process of allowing a lender to take possession of a property after the borrower defaults on their loan. As you already know, a new owner means newer terms for the tenant to keep renting a room in the building.
Attorning to the bank or owner who takes the property ensures you keep your space there and can keep paying rent and following lease obligations. The process to attorn is the same in almost all cases, so don’t worry about that.
When a landlord defaults on their loan and is near a foreclosure sale, they should let you know with enough time to prepare. You will most likely need to negotiate with the bank or new owner for them to let you stay in the place.
Subletting
People won’t only use attornment to discuss a new lease term with property owners. This is also important for people subletting a part of the place they are renting.
In this case, the original tenant has a lease agreement with the landlord for a property. They want to find another person to occupy that space temporarily or permanently with the landlord’s permission. That new subtenant would pay you rent while you are responsible for paying the property owner.
To do all that, you need your landlord’s permission, so you will have to make an attornment clause in the sublease agreement. In that legal document, you can clarify the subtenant would attorn to the main property owner if you vacated your original lease.
Storage Locker
The last example we will talk about on this page is when people rent storage lockers in a local storage facility. Although it’s way less common, commercial tenants will need to attorn to the new owner of the building if they want to keep renting that locker.
Consequences of Not Following Attornment Procedures
Formal agreements such as attornments play a crucial role in protecting your lease rights. It’s important to be on the same page as the new owner of a property. Not attorning could lead to severe consequences.
The most severe one is eviction. If you keep paying rent to your old landlord after another person legally buys the property, they might think you don’t acknowledge them as owners. Hence, they could refuse to discuss new lease terms with you and instead start an eviction process.
Communication problems and the lack of formal agreement could also make you pay double the rent. We mean paying the old and new landlord. Although that allows you to stay in the property, it represents a heavy financial burden.
One of the main reasons to attorn to the new owner of a place and start a contractual relationship with them is to protect your lease rights. Without attornment, the new owner can tell you that your old lease terms are no longer valid, which could cause constant rent increases.
We Can Help Landlords & Renters with Attornment Issues:
People often see attornment as a way to be cautious when a new landlord comes into the scene. If you choose to make a formal agreement with them, you can straightforwardly discuss new lease terms and smoothly transition to them.
The fact that you have a formal agreement with the help of a real estate attorney means the new landlord can’t randomly increase your rent or start an eviction process. However, you first need to convince the owner of the property to let you stay.
Anyone looking forward to starting an attornment process or other real estate transactions in Windsor, Ontario, can call Maximum Property Solutions. We will help you negotiate with your new landlord or property owner to help you protect your lease rights.
You could also visit our website to learn more about Windsor rental properties. Are you looking for one? Call us at (519) 969-7159.
