Assuming you change nothing from the original lease agreement, and have properly continued the original lease, and then you would have also acquired the right to terminate the lease at the end of its original period. There are some things to be careful of, and we’ll look at some of the legal sources for breaking or continuing leases. Some of the rules will change if this “investment” property is a residential, and not a commercial property. Here’s a good source for information on residential leases: http://law.uark.edu/documents /Bailey_Landlord_Tenant_(Pretrial_Practice).pdf.
 
The first test is what does your purchase agreement say about continuing a pre-sale lease? Some commercial leases specifically address the sale of a leasehold and protect it from early termination. This is a way to guarantee more stability in commercial leases, where the renter very often expends enormous amounts of money to develop a useful location and facility.
 
You might want to approach the renter/tenant and (if this is something you want to do yourself) ask if they are interested in a new lease. One place to get some information on remaking a contract would be from the Service Corps of Retired Executives, or SCORE. http://nwascore.org/. It can be to your advantage to offer a new, shorter than 5 year term, but which still extends past the original five year term.
 
The general rule in Arkansas is that when you buy a property, you have usually acquired all of the original owner’s rights as well as their obligations. Pre-existing leases are usually factored into the purchase value. Put another way, an old lease is honored by most types of new ownership. Again, the key is what the original lease said, and how your purchase agreement incorporated that original lease. Look for language saying the original lease agreement is binding on the first owners’ “successors and assigns” (meaning you).
 
It’s not clear whether you have already purchased the property, and how long ago that purchase was. Trying to terminate a lease usually has to happen before you accept any rental payments. Once you take a rental payment, you have basically resurrected or continued the old lease. Not only have you begun the process as an owner, but you have also had a choice to make about terminating the lease after you acquired the property.
 
 

• The Statute Of Frauds

 
One thing you’ll need to look at (since I can’t look at your actual purchase agreement or the lease agreement) is what Arkansas requires for property contacts. What must be in a property contract is addressed by what’s known as the Arkansas Statute of Frauds. To be valid, a real estate contract has to be very specific: here’s a summary of what had to be in your contract…http://www.kingsrivertitle.com/general-legal-news/when-is-an-agreement-not-enforceable-a-look-at-arkansas-statute-of-frauds/. If there was a mistake in addressing this lease, you may also have some rights to rescind the purchase.
 
 

• Arkansas Lease Rules

 
Arkansas has some very interesting rules about what rights exist when a termination clause is not used. This can be very relevant in your case, if you failed to use your limited right(s) to terminate the lease, after buying the property. One thing that often (not always, but often) happens is that a new owner fails to “exercise” or use the termination power he may have. This often turns the old lease into a new lease. This doesn’t mean there’s no longer a right to terminate a lease, but there’s a presumption the old lease term applies. Here’s a case discussing these rules: “Agreements between landlord and tenant need not be in writing and may be implied in fact from the conduct of the parties or by a verbal agreement.” http://caselaw.findlaw.com/ar-supreme-court/1211137.html. So if you plan to terminate the lease, be sure to follow the strict notice requirement (often six months).