Simon Says: Does a sitting tenant rights outweigh that of landlord’s spouse?

Published
05/24/2017 by

This is the thirteenth in a weekly series of legal advice provided in a short and entertaining story format.

 

This week's areas of Interest: Landlord Tenant Disputes

 

This week's keywords: Contract, Tenancy Law, Limitations on Right of First Refusal

 

 

Simon Says: Does a sitting tenant rights outweigh that of landlord’s spouse? 

 

 

Jack, the CEO of Jack Enterprises Ltd, recently fell in love with a Victoria Secrets model. As a wedding gift, he decided to give her one of his mansions, which was currently leased to Alex, as a gift.

 

However, Jill, his new bride, didn’t want to accept such a generous gift. She didn’t like taking things without earning it. After a series of convincing, she finally agreed to pay a low price of 1 million for the three-story mansion. A sale and purchase agreement was made accordingly.

 

Jack knew that Alex’s lease was about to expire, so he went over to talk to him, to ask him to start finding a new mansion. After all, the lessee Alex had lived there for 10 years already. It seemed too brutal to just kick him out without a three months’ notice.

 

However, Alex really loved that mansion as it gave him a complete view of the beach. He had tried to make Jack sell it for a billion times, without success.

 

‘I have to sell it to my wife. It would be her new maiden house. Please understand this. I can rent you another mansion.’ Jack said.

 

‘I have the right of first refusal as I am your tenant. Whatever price your wife pays, I’ll pay the same. In cash.’ Alex argued.

 

Jack replied, ‘Come on. I’ll sell another mansion to you. One of your picking. At a discount.’

 

Refusing to accept the offer, Alex said, ‘No. It has to be this mansion. I am not moving out of it.’

 

So can Alex exercise his right and buy the mansion?

 

 

 

Prof Simon Says:

 

No. Alex’s rights cannot be exercised in this case.

 

The right of first refusal goes under the condition that Alex is a sitting tenant and that the buyer is a third party. If the case is between Alex and a random Bob, Alex can exercise his right and buy the mansion under the same terms and conditions.

 

However, as the buyer is Jack’s wife, being a close relative, Alex has no choice but to take Jack’s offer and buy another mansion or leave for mansion when the lease expires.

 

Simon Says - Episode 13: Can a sitting tenant rights outweigh that of landlord’s spouse

 

 

For more about this or to contact Professor Simon Choi at www.acmeardent.comsimonhkchoi@163.com, +86 13823677853 or by WeChat: simonhkchoi. 

 

ACME Ardent's Simon Choi WeChat QR Code

 

"This article was originally written in Chinese by Mr Huanyu Li and rewritten into English by Simon Choi."

 

Simon Choi

About the Author: Professor Simon Choi

Prof Simon Choi, solicitor and linguist, is an international lawyer, qualified to practise law in England & Wales and in Hong Kong, China. Simon graduated from law schools of the Peking University, the University of London and the University of Hong Kong respectively, with an in-depth knowledge of Chinese laws and common laws and with more than 20 years experience in China practice and international trade, investment, finance, merger & acquisition. He is an adjunct professor of laws at the Zhongnan University of Economics and Law. Simon is the founding partner of Acme Ardent and can be reached at simonhkchoi@163.com or +86 13823677853.

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