Leasing License Practice Exam

In a conversion to condominiums, what is the legal status of an existing lease?

1. It can be canceled with notice

2. It remains valid until its terms expire

3. It automatically converts to a condominium agreement

4. Tenants must renew their leases

The correct answer is: It remains valid until its terms expire

In a conversion to condominiums, the legal status of an existing lease is that it remains valid until its terms expire. This means that tenants who have valid leases can continue to occupy the premises under the same terms and conditions outlined in their leases until the lease comes to its natural conclusion. This protection is essential because it upholds the rights of tenants during the conversion process, ensuring that they are not abruptly displaced and can maintain their tenancy as agreed upon in their lease contract. Tenants have legal protections that recognize existing leases even when ownership structures change, like a property converting to condominiums. This allows them stability and security in their housing situation throughout the transition period. Consequently, once the lease expires, any renewal or change to the tenancy will need to adhere to the new condominium rules and regulations, which may differ from their original lease agreements.