Contract Void? Undermarket buddy hook-up prior to closing on storage

[Nate B.]

Must annual contracts be upheld after transfer of ownership?

Scenario:  Closing on a storage facility.  A few annual leases in there at under market rents.  I was going to leave them in place; however, this weekend the sellers had an existing tenant sign an annual lease at 50% the market rate.  Definitely smells like a buddy hook-up to try to protect him and hose me.

I'm intending to raise rents by 1 October.  I'm now of the opinion to cancel all contracts and start over.  The month-to-month are easy...new rates are X...take it or leave.

May hit up an attorney, but not big enough money to warrant paying for a sit-down with an attorney.  Just annoying.

Seems it's not someone's home, so I can do what I want with the commercial property...tear everything down, if I wanted.

Thoughts??

[Brad M.]

I'm not an attorney - you should seek the assistance of a local one. 

As the new owner, you will have to honor the existing leases. However, your contract should have stated that the current owner can not enter into any new agreements prior to close without your approval. If that clause is in there, you can void that "buddy lease". 

It doesn't matter whether it is commercial or not, legal agreements have to be honored upon transfer.