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The rule “sale does not break lease” protects the tenant: if the landlord sells the property, the buyer automatically becomes the new landlord and is bound by the existing lease agreement. However, the rule is not absolute: only agreements directly related to the use of the property and the rent transfer. Clauses such as a right of first refusal, trade protection, or set-off often do not transfer.
The principle of "sale does not break lease" has been legally established since 1838 to protect the tenant. If the landlord sells the leased property, the new owner automatically becomes the landlord and is bound by the old lease agreement. The rule is strict — it cannot even be deviated from in the lease agreement — but not absolute.
The scope of the rule
The new owner must respect the old agreements, but only insofar as they relate directly to the use of the property and the price to be paid — think of maintenance, modifications to the building, or handover at the end of the lease. Agreements without such a direct connection do not transfer. Disputes frequently arise regarding which agreements do or do not transfer.
Example: the right of first refusal
Such a discussion arose in a ruling by the Arnhem-Leeuwarden Court of Appeal (ECLI:NL:GHARL:2021:209): can a right of first refusal also be invoked against the new owner? (A right of first refusal gives the tenant the first right to purchase if the landlord wishes to sell.) The court examined whether the rent included not only a fee for use, but also a fee for the acquisition of the property — as is the case with lease agreements. If so, the right of first refusal is linked to the rent and transfers with it. In this instance, that was not the case, so the new owner was not required to take into account the right of first refusal from the original lease agreement.
Other clauses do not always carry over either
Another example is the trade protection clause, which prohibits the tenant from competing with neighboring shopkeepers. It has previously been ruled that the tenant is no longer bound by this after the sale, unless he agrees to this again with the new landlord. A set-off clause (allowing certain claims to be set off against the rent) is also often lost due to the sale.
Frequently Asked Questions
What does “purchase does not break lease” mean?
That an existing lease agreement remains in effect if the property is sold: the buyer automatically becomes the new landlord and is bound by the lease agreement.
Do all agreements from the lease transfer?
No. Only agreements directly related to the use of the property and the rent. Clauses such as a right of first refusal, trade protection, or set-off often do not transfer.
I am buying a rental property — what should I look out for?
Have the lease agreement thoroughly reviewed to determine which terms you will adopt and which you will not, and what, if anything, needs to be recorded again.
Have rental agreement reviewed
Are you becoming the owner of a rented property, or are you, as a tenant, getting a new owner? The legal experts at MKB Juristen assess which clauses transfer. View our expertise in real estate law or schedule an intake meeting .
