Tennessee Real Estate Exam Practice Question
If the owner of a rental property sells the property to an investor who hires a new management company what happens to the existing tenants' leases?
Correct Answer: A
Rationale: When a rental property is sold, the existing tenants' leases remain intact and binding. This means that the lease terms prevail, ensuring that tenants retain their rights and obligations as outlined in their agreements.
Option B is incorrect because tenants do not have an automatic right to cancel their leases simply due to a change in ownership.
Option C is misleading; leases are not automatically canceled upon the sale of the property.
Option D is also incorrect, as the new management company cannot unilaterally cancel existing leases without cause, particularly not with just 30 days' notice.
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