If you own commercial property in New Jersey with multiple tenants, what are your obligations to them if you sell the property? Whether it’s an office building, a shopping center or a mixed-use property, it’s crucial to understand your responsibilities under the Tenant Protection Act of 1992 and other laws.
Keeping your tenants informed about the sale will also help your relationships them stay on solid ground and minimize the possibility of them jumping ship or taking legal action. These things could decrease the value of the property and jeopardize the sale.
Steps to take before putting the property on the market
Before you list the property or accept an unsolicited offer to buy it, there are a number of things you need to do. For example:
- You need to provide the required notifications to all tenants.
- Look at any contractual obligations to give tenants the chance to purchase their individual space for fair market value (FMV).
- You should resolve any ongoing or unresolved tenant disputes.
It’s a good idea to go through all of your tenants’ lease agreements. One or more may have unique terms that the seller should be aware of. Further, long-term leasees may expect special consideration of one sort or another.
Improving your chances of a successful deal
It’s crucial to keep the lines of communication open with the buyer and their representatives. Having deadlines throughout the process can help ensure that the sale is completed without unnecessary delays.
Having experienced legal guidance throughout the process is crucial. This can help you deal with any tenant issues and help ensure that you remain in compliance with all tenant, tax and other laws. It can also help protect your rights and interests as you work with the buyers so that you have the best possible outcome from this transaction.