Illinois Leasing Agent Practice Exam

When an apartment building is sold, what happens to existing leases?

1. They become void immediately

2. Remain in full force and effect

3. They are renegotiated with the new owner

4. They are automatically canceled

The correct answer is: Remain in full force and effect

When an apartment building is sold, existing leases between tenants and the current landlord remain in full force and effect. This means that the new owner of the property is required to honor the terms of those leases. Tenants maintain their rights under the lease agreements, which includes their right to occupy the premises, pay rent, and have the lease terms upheld according to the original contract. The reason leases remain valid lies in the legal principle of "successors in interest." When the property is transferred, the new owner essentially takes over the assets and liabilities of the property, which includes any active leases. This continuity is crucial for tenant security and legal protection, ensuring that tenants are not left without housing or suddenly required to vacate due to a change in ownership. Renegotiation or cancellation of leases typically requires explicit agreement from both parties, and such actions cannot be assumed simply because a property changes hands. This ensures that tenants have stability and predictability, especially in long-term rental situations.