What Are My Rights When My Landlord Sells the House I’m Renting?

by Lesly Gregory | Published: Mar 22, 2022

Settling into a rental home is already a hectic experience. But, once the boxes get unpacked and the furniture gets arranged, it quickly starts to feel like home. That is, it's home for the length of the lease agreement.

But, what happens when all that's interrupted because your landlord is selling the rental home. The news is stressful, even if you're given a written notice well in advance.

Questions begin snowballing. What about your lease? Do you know your basic tenant's rights? What if the property sells fast, am I out of a home?

All of these questions are valid and there are answers available — and tenant laws in place — to protect you. For most tenants, situations like this work themselves out, but when a landlord is selling a house, you need to know what's what.

Why is your landlord selling the house?

Although real estate is often a long-term investment strategy, certain factors can contribute to a landlord selling a home. These include:

  • Wanting to buy a new piece of real estate. There's a tax break if you use the sale of one piece of property to buy another.
  • Evaluating the housing market. If conditions are strong for sellers, it's possible the price tag for selling the property is too high to pass up.
  • Estimating property tax. If taxes are going up, the home is no longer a sound investment for the landlord.
  • Reviewing earning potential. If the landlord isn't able to raise the rent, they may no longer want to hold onto the home.

These are all sound, financial reasons to let go of a piece of real estate. But, if it's a tenant-occupied property and the landlord is eager to sell, these factors may make things more complicated for you. However, there's always a chance that the new owner will also want to use the home as a real estate investment. They may allow you to continue on in the rental unit. It's an unknown outcome, but not worth taking a chance on.

Put your foot down about showings.

How to live in a house that's for sale

It's perfectly legal for your landlord to put their rental property up for sale while you're still living there. State laws may set parameters around giving notice, but the short and sweet of it is, they're allowed.

As long as your tenants right aren't violated, the process of selling your primary residence to a new owner isn't that rough on you. This is assuming your lease remains intact and you won't have to move out during the sale process — unless you want to.

Both you and your landlord need to come to an agreement around that particular issue. You also need to set expectations during the sale process. You need to understand that this change may mean open houses and a real estate agent coming through the property. But there's no reason you still shouldn't receive advance notice about these visits and events. In fact, both the landlord and the real estate agent should make this situation convenient for you, as well.

How to keep home showings comfortable for you, too

Since your lease agreement is still valid, your landlord neess to respect you and your space during the process. Real estate agents can't come through at all hours. You aren't expected to leave your home all the time, on any day, for a showing either. Your tenant rights must get protected, as well.

If you know your landlord has begun the sales process, consider creating a tenant's agreement around showings. To do this:

  • Set parameters to ensure showings of the property occur during reasonable hours. You'll have to leave the property each time. But you can set limits or give preferences on acceptable hours and days.
  • Require 24-hours notice for showings, either by your landlord or a real estate agent
  • Ask your landlord to provide a professional cleaning service to keep the house in "showing order." It's the landlord's sale. it's not your job to keep it prospective buyer ready.

You can also request your landlord does not put a for sale sign in the front yard. This ensures nobody will pass by and knock on the door asking to look around. It helps you maintain your privacy until your lease ends or the new owner takes over, whichever comes first.

When the house sells, you may have to move.

What happens if someone sells the house I'm renting?

A real estate investor is eager to buy a rental property that already has a good tenant in it. This means someone who pays rent on time, all the time. Getting a new landlord before your lease ends could mean nothing. You just stay in the home as long as the lease remains and then sign a new lease, if you want, at that point. Nothing would change as far as the terms of your long-term lease, you'd just have a new landlord to contact.

For those with a month-to-month lease, there are already rules built-in regarding what constitutes reasonable notice to vacate. There's usually a 30-day requirement, for both sides, to indicate your intention to move or their intention of lease termination.

Does the possibility of this happening have to go into the lease agreement?

While there isn't specific language discussing the possibility of a new landlord, a lease or rental agreement could cover this.

Look for a 'lease termination due to sale' clause. This particular section will set a time frame you'll need to move out, regardless of your existing lease, if there's a property sale. It impacts both a fixed-term lease and a month-to-month lease.

If you're careful, though, and catch this clause before you sign your lease, you can negotiate. You can ask for a longer time frame to leave to avoid an eviction notice. You can also try to ask for relocation fees to get added, as well, but don't expect that to work out in every instance.

What happens to my security deposit?

Nothing changes when it comes to tenants' rights and the security deposit. Your landlord, whether it's the new or old one, can only withhold security deposit funds to pay for repairs where the damage was the tenant's fault.

Any leftover money must get returned to you within the legally required time frame. This varies by state but averages out between 14-60 days.

No matter when you move, or under what circumstances, this is the process for handling a security deposit. Failure of your landlord to do so gives you the motivation to hire a real estate attorney for support.

Is this a common issue with a rental property?

While not a super-frequent occurrence, from time to time, landlords sell their rental property. What's important is whether, during that process, they protect your rights. Especially if you live in a tenant-friendly state, where the laws are more beneficial to you, you want to make sure all legal tenant's rights get adhered to. You can always reach out to a legal advisor for help in this area, as well.

You may not have to move at all.

How long do tenants have to move out after the home sale?

Even with a month-to-month lease agreement, you're entitled to a certain amount of notice before dealing with a move motivated by a property sale. The average amount is 30 days, but that's not always enough to successfully relocate. If it's not, you can always rent a storage unit for your stuff, ask to stay with friends and family and continue your search.

Fortunately, not all situations call for a mad dash out of the property and tenants end up with plenty of flexibility.

Can I wait until my lease expires?

This all depends on what type of lease you have, whether notice of the changes was properly delivered and what the next landlord wants to do about a new lease.

For month-to-month tenancy, your lease really expires every month, so a landlord selling the property only needs to give you 30 days' notice.

For those with a fixed-term lease agreement, it's easier for the landlord to wait until the lease term is up to begin with. Then, nobody needs to worry about a mid-lease sale. However, staying until the end of your lease is advantageous to the next landlord since then, they don't have to try to find other tenants to occupy the home. They even look at the property specifically because you're already there.

Since there are so many potential situations, it's best to stay in close communication with your current landlord to find out what the expectations are of the new owner.

Does my old landlord have to help with relocation?

It's not required for a landlord to provide a tenant relocation allowance or any other tenant compensation for selling the home you're living in. Relocation fees are more often associated with moves related to a job opportunity than something like this.

Instead, many tenants get relocation assistance from their landlord in a non-monetary way, whether it's the inside scoop on an available property to move into or suggestions on the best ways to look for your next home. This help isn't legally required though, so you may end up on your own, too.

Being the tenant whose landlord is selling isn't necessarily a bad thing

Although every situation where a tenant is living in a house the landlord wants to sell is different, it isn't necessarily terrible. The new owner could end up being so great, you sign a new lease and stay on, rather than try to end your lease early.

Things could also change quickly, putting you in a situation where you're asking for a relocation fee as you run out the door.

Either way, this is something you can get through as the tenant with proper communication and a close eye on tenant rights.

Categories: Renters

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