When real estate under an estate for years is sold, what happens to the lease?

When real estate that is subject to an estate for years is sold, the lease binds the new owner. An estate for years is a type of leasehold estate that has a fixed duration, and the terms of this lease remain in effect even when the property is sold to a new owner. This means that the new owner must honor the existing lease agreement and the rights of the tenant.

The principle behind this is that leases create interests in the property that are legally enforceable, and they typically do not terminate simply because of a change in ownership. This is further reinforced by the concept of "assignment" of lease rights, where the lease obligations carry over to the new property owner, ensuring continuity for tenants. Thus, the tenant retains their rights to occupy the property until the agreed-upon expiration of the lease, regardless of the sale of the property.

Understanding this concept is key in real estate, as it ensures that buyers can enter into property transactions with clarity regarding existing leases and the obligations they may inherit regarding tenants.