Tenants Rights Upon Condemnation

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Does a Lease Terminate When a Building Is Condemned?

Complete condemnation terminates a lease because there is no housing left for a tenant to live in. Condemnation ends the tenant's liability for rent accruing after title vests in the condemnor, which is usually the local government or housing authority.

Is Rent Paid after the City Housing Authority or the Government Takes over Returnable to Me?

Any rent paid in advance should be refunded to the tenant. Condemnation gives a tenant two possible claims: 

  1. The value of the unexpired term of the lease
  2. The value of fixtures, meaning any installations, alterations, additions, or improvements the tenant has made

What Happens If Only Part of the Land, Property, or Building Is Condemned?

If only part of the land has been condemned, the question of whether a lease ends is troublesome. Courts are generally split on how to handle leases as partial condemnations. In general, courts have indicated that if the condemnation affects the nature and character of the lease and substantially impairs habitability of the premises, then the lease should end.

Can a Tenant Recover for the Remaining Part of the Lease?

In general, absent any agreement to the contrary, a tenant whose lease is cut off by condemnation has a claim for the value of his unexpired term. Unfortunately, the tenant can only recover for the unexpired term if they are likely to suffer losses related to having to pay for alternative housing. That is, if the dominant market for similar accommodations forces the tenant to pay more, the tenant can recover losses. Additionally, the tenant cannot recover attorney's fees for going to court to recover losses related to the lease.

Can a Month-to-Month Tenant Recover Paid Rent?

Month-to-month tenants can only recover a portion of the rent they would have paid had they lived on the premise for an entire month. That is, if a tenant had intended to live in a property for 30 days, but the condemnation of the property forced them out after 15 days, they would be entitled to recover half their rent. Month-to-month tenants are not entitled to moving costs or attorney's fees related to the condemnation.

How Often Do Condemnation Clauses Appear in Leases?

Condemnation clauses frequently appear in commercial and residential leases, especially in 'disaster prone' areas near the ocean, rivers, or in earthquake zones. Tenants should read these clauses carefully before signing a lease, and should refer to the clauses when condemnation becomes an issue.

Should I Contact a Lawyer?

If a tenant is involved in a long term lease or if a tenant is involved in a commercial lease they should contact a real property lawyer immediately. Loss of a long term lease can involve serious losses for the tenants, and thus they have substantial rights. A local lawyer can help explain these rights and what claims you may have under the law.

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Last Modified: 08-11-2014 12:23 PM PDT

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