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In a situation where someone is subleasing part of a residential property from a master tenant , but finds themselves in the position to purchase the property from the landlord.

In other words, what if a roommate buys the house you are living in?

How might this be viewed from the conflict of tenant rights of both the master tenant and the previously-subtenant, in California?

  1. If there are ongoing disputes with the sublandlord and subtenant.
  2. If the sublease has not terminated when ownership is transferred
  3. If the sublease is co-tenancy (both tenant and subtenant - now landlord occupy the property)

I guess in commercial property world it is not unheard of someone subleasing back space from their own lessee.

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Just think of the subtenant cum owner as two separate people with two separate roles.

Tenant = T Subtenant = ST Old owner = OO New Owner = NO

The rights of the tenant vis-avis the new owner will be informed by the lease and the local laws. Generally, if the sale happens in the middle of the existing lease, the NO is obligated by the terms, as is the T. NO cannot just kick T out, and T cannot just break the lease. The lease may say what could happen and local laws will apply.

Likewise, ST has whatever contract with T that previously existed. Pretend NO and ST are different people. If T owes NO $1000 per month, and ST owes T $400 a month, that continues even though ST and NO are the same person.

  1. Depends on what kind of dispute.
  2. See above. All contracts continue, subject to whatever the lease with the original owner and the subtenancy agreement say abut modifying or breaking the lease and sublease. Local laws apply. Note, if the subtenancy was "off the books" or was done when not allowed by the original owner, and if it was not in a place that the local law says owners cannot deny subleasing, then tenant might not have any protection. ST, now that he is owner could just move out and stop paying. On the other hand, even if he is the owner, he cannot just say "I am the owner now, so I am moving back in for free" because the original lease gave the tenant use of the whole property. But ST could just drop out because T always owed OO, and now NO, the full rent.
  3. Do you mean if rather than sublease, they were both on the original lease? Interesting, but just imagine it as the obligations before the sale = the obligations after the sale. I don't know though. There are some tax implications for an owner occupied rental.
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  • I think you went above and beyond covering this hypothetical, as a law layperson considering the two roles as independent entities makes sense. TO clarify what I meant W.R.T #3 Often residential subtenancies are roommate situations, unlike simply subleasing the entire property. For example, as I understand it an "owner-occupant" may have more avenues for eviction than a third party landlord, but he is not occupying as the landlord I guess – crasic May 5 '20 at 18:40
  • He is occupying as the landlord, but only after the first lease is done, I think. So ST/NO could kick T out next year for example. Again, local laws apply- some are very protective of tenants, some not. – Damila May 5 '20 at 19:36
  • Yes, it would be simpler if NO wrapped the property in an LLC, as at that point NO and ST would be literally different people. – Harper - Reinstate Monica May 5 '20 at 20:12

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