Real Estate Term: Attorn
Definition
The term “attorn” is a legal concept wherein a tenant acknowledges or transfers their duty or allegiance to a new landlord. When property ownership changes hands, tenants must typically recognize the new owner as their legitimate landlord, and this transfer of recognition is known as attornment. It’s a standard process in real estate transactions, particularly in the sale or transfer of leased property.
Examples
- Commercial Property Sale: A company leases office space in a building. If the building is sold to a new owner, the tenants need to “attorn” to the new owner, recognizing them as the landlord moving forward.
- Residential Property Transfer: A landlord sells a rental home to a new buyer. The existing tenant must attorn to the new property owner, meaning they recognize and transfer their lease obligations to the new landlord.
- Mortgage Takeover: When a mortgage lender forecloses on a property and then rents it out, renters in the property must attorn to the lender as their new landlord.
Frequently Asked Questions
Q: What is the purpose of attornment in real estate?
A: Attornment ensures that tenants legally recognize and accept the new property owner as their landlord, thus ensuring continuity in lease agreements and rental payments regardless of the change in ownership.
Q: How must a tenant attorn to a new landlord?
A: Tenants typically receive a formal notice from the original and new landlords, informing them of the ownership change and directing future rent payments to the new owner. The tenant’s attornment often occurs automatically or through acknowledgment of the notice.
Q: Does attornment affect the terms of the existing lease?
A: No, attornment does not change the original lease terms. Tenants continue to abide by the existing lease agreements despite the change in landlord.
Q: Is a formal document always required for attornment?
A: In some cases, especially in commercial real estate, a formal attornment agreement is drawn up and signed by the tenant and new landlord. In other cases, an attornment may occur through the customary notice process without necessitating formal documentation.
Q: What is the difference between attorn and attornment?
A: “Attorn” is the verb form, meaning the act of recognizing a new landlord. “Attornment” is the noun form, referring to the agreement or process of such recognition.
- Lease Assignment: Transfer of lease obligations from one tenant to another.
- Sublease: Renting out leased property to a third party by the original tenant.
- Leasehold Estate: The interest or rights a tenant has under a lease agreement.
- Subrogation: The legal right held by a party to recover funds or claims on another party’s behalf.
- Novation: Replacing an old obligation with a new one, or replacing one party to an agreement with a new party.
Online Resources
References
- “Understanding Real Estate Contracts” - An overview provided by the American Bar Association.
- “The Language of Real Estate” by John W. Reilly.
- “Real Estate Principles” by David C. Ling and Wayne R. Archer.
Suggested Books
- “Real Estate Law” by Marianne Jennings - A detailed exploration of real estate law and terms like attornment.
- “The Essential Guide to Residential and Commercial Leases” by Mark Warda, J.D.
- “Principles of Real Estate Practice” by Stephen Mettling and David Cusic.
Real Estate Basics: Attorn Fundamentals Quiz
### What does "attorn" entail in real estate?
- [ ] Changing the terms of a lease agreement
- [x] Recognizing a new landlord after property ownership changes
- [ ] Forgetting previous lease payments
- [ ] Signing a new lease after a rental payment
> **Explanation:** "Attorn" refers to the act of recognizing a new property owner as the landlord, maintaining continuity in lease agreements and obligations.
### When might a commercial tenant need to attorn?
- [x] When their leased building is sold to a new owner
- [ ] When they change their business location
- [ ] When they disagree with a rent increase
- [ ] When the property manager changes
> **Explanation:** A commercial tenant needs to attorn when the property they occupy is sold to a new owner, recognizing the new owner as their landlord.
### How does attornment affect an existing lease?
- [x] It does not change the terms of the existing lease
- [ ] It voids the existing lease agreement
- [ ] It always requires a new lease to be signed
- [ ] It increases the rent automatically
> **Explanation:** Attornment simply acknowledges the new property owner as the landlord; it does not alter the existing lease terms.
### What official notice might a tenant receive to initiate attornment?
- [ ] An eviction notice
- [x] A notice of ownership change
- [ ] A lease amendment form
- [ ] A rental application
> **Explanation:** Tenants typically receive a notice of ownership change from the old and new landlords, informing them of the ownership transfer and directing future rent payments to the new owner.
### Does attornment require the tenant's approval?
- [ ] Always
- [x] Not necessarily; it can happen automatically
- [ ] Only for residential properties
- [ ] In all cases through a court order
> **Explanation:** Attornment can happen automatically by recognizing the notice without needing formal tenant approval, especially if stipulated in the original lease.
### Can attornment occur without a formal document?
- [x] Yes, through standard notice processes
- [ ] No, it always requires a formal agreement
- [ ] Only in residential property cases
- [ ] Only in commercial property cases
> **Explanation:** Attornment can occur through standard notice processes, without the necessity of a formal document, although it may be documented for clarity in commercial transactions.
### What happens to the tenant's obligations to the previous owner after attornment?
- [ ] They are nullified
- [x] They are transferred to the new landlord
- [ ] The tenant must renegotiate the lease
- [ ] The tenant must vacate the property
> **Explanation:** The tenant’s obligations are transferred to the new landlord who takes over the lease terms as per the attornment process.
### In what situation would a formal attornment agreement be likely?
- [ ] For quarterly rent adjustments
- [ ] When changing property managers
- [x] In lucrative commercial property transactions
- [ ] When the property undergoes renovation
> **Explanation:** A formal attornment agreement is likely in commercial property transactions involving significant investment for clarity and legal record.
### How does a tenant's acknowledgement of a new landlord get formalized?
- [ ] Through verbal agreement
- [ ] By stopping rent payments
- [x] By adhering to notices and potential attornment agreements
- [ ] By signing a petition with other tenants
> **Explanation:** A tenant’s acknowledgment can be formalized through adhering to notices sent by the previous and new landlords and potentially signing any necessary attornment agreements.
### Why is attornment important in property sales?
- [x] It ensures legal continuity of lease agreements
- [ ] It immediately increases rental income
- [ ] It allows abandonment of the lease
- [ ] It minimizes property tax
> **Explanation:** Attornment is important because it ensures the legal continuity of lease agreements despite ownership changes, maintaining rental revenue streams and tenant stability.
