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Simple English definitions for legal terms
change-of-ownership clause
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A quick definition of change-of-ownership clause:
A change-of-ownership clause is a rule in an oil-and-gas lease that says the person leasing the land must be told if the land's ownership changes. This is so the lessee knows who to work with and can continue their lease agreement with the new owner.
A more thorough explanation:
A change-of-ownership clause is a provision in an oil-and-gas lease that outlines the notice that must be given to the lessee in the event of a change in the ownership of the leased land. This clause is also known as an assignment clause.
For example, if a company leases a piece of land for oil and gas exploration, and the land is sold to a new owner, the change-of-ownership clause specifies how much notice the lessee must receive before they are required to recognize the new owner. This notice period allows the lessee to adjust their operations and ensure that they are complying with the terms of the lease.
Another example could be a rental agreement for a residential property. If the property is sold to a new owner, the change-of-ownership clause would specify how much notice the tenant must receive before they are required to recognize the new owner and make any necessary changes to their rental agreement.
Overall, the change-of-ownership clause is an important provision in any lease or rental agreement that helps protect the rights of both the lessor and the lessee in the event of a change in ownership.