Tenant Rights When Rental Property is Put Up for Sale

If you’ve been renting the same property for a long time, chances are that you call this place home and really mean it. You have collected hundreds of happy moments associated with your house, you know all its ins and outs, and maybe you even dream about it while being far away. This is your home. Well, at least until your lease expires.

It’s not a surprise many tenants feel frustrated and confused when it turns out that their home has been put up for sale. Often, it feels like a combination of shock, anger, and stress all rolled into one. You are overwhelmed by questions you have no answers to: How could my landlord do this to me? What are my rights? Is selling a rental property with tenants even legal? How soon should I move out? Is there any chance of staying?

To begin with, there is no need to go crazy. Like most problems on this planet, this one has a solution. The fact that your rental home is available for sale does not automatically mean you should grab your bags and saunter off into the sunset. After all, you have your tenant rights, and they are meant to protect you exactly in situations like this.

So let’s dig deeper and find out what landlord-tenant law says in this regard and how to minimize your loss — both mental and financial — when you find out your rental home is available for sale.

Quick fact: your course of action will depend greatly on the type of lease you have.

If You Have an Oral Agreement

Hopefully, you are reading these lines only out of curiosity. Because as experience confirms times and times again, going for a verbal rental agreement is one of the biggest mistakes tenants make. Although it is true that such agreements are binding by law, they are easy to misinterpret and hardly possible to prove. Having no lease agreement in writing will leave you with no document to turn to if you have any issues or concerns. Also, if you end up having to go to court, oral agreements are much harder to work with. But no worries, learn what rental rights you have without a written lease and try to make the most out of this knowledge.

If You Have a Month-to-Month Lease

If you are renting on a monthly basis, it basically means that your contract expires and gets renewed every 30 days. Should your landlord decide to sell their property and terminate your month-to-month lease, they can do it with ease. All it takes for them is to give you the notice to vacate within the reasonable term stated by the law.

This term varies from state to state, but it’s usually around 30 days. The rare exception is California, where month-to-month renters should be notified about the termination of their lease 60 days before the expected move-out day if they’ve been living in the same rental unit for a year or more.

But even if you have a month-to-month lease agreement, and it is relatively easy for your landlord to show you the door, it doesn’t necessarily mean you should be looking for a new place to rent right away. Just like with fixed-term leases, your month-to-month contract remains valid under the new landlord until they say otherwise.

If You Have a Fixed-Term Lease

Although things are more complicated with a fixed-term lease, it’s still possible to learn all the ins and outs of your tenant rights when your landlord decides to sell a property. So let’s see what steps you should take to minimize your loss when you learn your rental has been put up for sale.

More like this: 7 Warning Signs in Your Residential Lease Agreement

Read Your Lease Agreement First

Generally speaking, a lease agreement is yet another form of business contract. And contracts are meant to predict all possible conflicts that might arise during their period of validity. So chances are that your lease copy has all the answers you’re looking for.

It might state that the property you are renting can be put up for sale at any time, but your landlord is obligated to give you a notice at least 60 days before they want you to move out. Alternatively, it might state that you can stay till the end of your lease but under a new landlord.

The bottom line is simple: as soon as you find out your long-term home has been put up for sale, read your rental agreement from A to Z. You need to know if there is a specific clause explaining your tenant’s rights in this particular situation.

Check Your State Landlord-Tenant Laws

Every state establishes landlord-tenant laws that all property managers must follow, designed to protect tenants, owners, investors, and managers. According to Real Estate Exam Ninja, a real estate broker’s license is the most commonly required type of accreditation needed for property management.

If your lease agreement doesn’t mention anything about your rights in the discussed situation, the next step to take is to refer to legislation. But remember that tenant-landlord law is different from state to state, which means your tenant rights might vary slightly depending on your location.

For instance, if you’re renting in California, you can have a sigh of relief as a local tenant-landlord law is tenant-friendly. In case you have a fixed-term lease, you have the right to stay in your rental property until its end. What’s more, when in the Golden State, you can request relocation assistance if your new landlord wants you to move out before your lease expires.

In case you’re a tenant in Washington, there is no need to worry either. Your lease remains valid if a rental property is sold, and your former landlord is obliged to provide you with a name and address of a new property manager. What’s more, your former landlord must transfer your security deposit to the bank account of the new owner (make sure it’s done if you want to get your security deposit back).

When in Illinois, tenants can be relaxed too, as their lease remains in full effect even if there is a new landlord. This means that tenants cannot be forced to leave or asked to pay a different rent until the current lease expires. According to Illinois tenant-landlord law, tenants must be informed about a sold rental property within ten days of purchase.

How Much Notice Does Landlord Have to Give When Selling the Property?

As we talked about it before, the exact number of days/month depends on your state and the length of your lease term. Usually, however, the landlord has to inform you in writing about selling the property 30 or 60 days in advance. 

This law was established to allow tenants time to relocate if that’s what they would prefer to do after discovering that the landlord has put the rental for sale. However, if you have a long-term lease agreement and prefer to stay at this place, you have the right to stay in your rental until the lease expires.

Do I Have to Pay Rent If My Landlord Is Selling the House?

You’re obligated to pay rent to your current landlord until the property is sold. After that, there are two scenarios that you can face as a tenant.

• If the new homeowner decides to continue renting out this property, you’ll just have to continue paying rent to your new landlord under the same agreement.
• Otherwise, you are only obligated to pay rent while you live in the property.

How Often Can My Landlord Show My House While I’m Living in It?

There are no rules or regulations about the maximum number of times the property owner can show the property or how often the showings can happen. Usually, the tenant-landlord law statutes would only mention that it should be “reasonable.” However, you should remember that one of the principal tenant rights is a right to privacy, so if you feel like that is violated by way too many showings or open houses at inconvenient times, you can bring it up with your landlord.

It depends on the state laws, but in most cases, the landlord has the right to show the property during reasonable hours and only after the 24-hour notice (in some states, it might be a 48-hour notice).

For starters, if you think that there are too many showings or they happen at times that are inconvenient for you, start with a polite, straightforward conversation with your landlord. Try to convey your frustration — after all, you’re the one living in the house, and you have a right to ask the landlord to arrange showings at hours that are also suitable for you. What’s more, if there are many interested buyers, discuss with the property owner the possibility of organizing an open house instead of separate showings.

If you feel that your landlord is not being reasonable about the times or number of property tours, you can check with your lawyer to see what you can do about it. However, we strongly recommend you be careful with such a fragile thing as a good tenant-landlord relationship that can be ruined with the involvement of a lawyer.

More like this: Illegal Actions Your Landlord Might be Taking

Can I Break My Lease If My Landlord Is Selling the Rental?

First, make sure you check your lease because most landlords tend to include the rights and obligations in this situation to stay flexible and vacate the property faster. In fact, in many cases, your landlord might also be interested in you vacating the property sooner than your lease expiration date. It is common to offer a tenant money if the lease does not have an early termination clause, and this concept is known as “cash for keys.”

Unfortunately, if your lease doesn’t mention anything about the sale situation, it will be a bit more complicated. State laws in many locations do not give tenants a way to get out of the lease in the case of property being sold. Usually, laws keep you under the same rental agreement but with the new landlord/homeowner.

Small tip: If you decide to move out at the end of your lease agreement and do not want to prolong it with the new property owner, make sure to check exactly when your rental period ends. For example, if your lease ends on the 31st of the month, you have to leave the apartment by midnight of the 31st unless you agree otherwise with the landlord.

Also, there is a chance that you can break your lease in case of any lease agreement violations on the landlord’s side. However, before trying to look for a breach in the contract, we recommend you talk to your landlord directly. Sometimes, it only takes one good talk to point out whether they plan to sell the house before the lease expires, how many times they want to show the house, etc.

Facts to Keep in Mind

• Tenant rights are superior to property rights. It means that if your former landlord is no longer your landlord and you’ve got a new one, you can stay in the property and enjoy your basic tenant rights until your lease comes to an end.
• You might be subject to a relocation allowance. If your landlord wants you to move out because a property is put up for sale, you might request a relocation allowance. In some cases, you’ll have a chance to receive a so-called tenant relocation payment.
• Even if your rental home is put up for sale, it is still your home. This means that you still have your right to quiet enjoyment, and the property owner cannot invite prospective buyers to an open house whenever they want to. A landlord is still obliged to give you at least a 24-hour notice (depending on your state).
• It’s time to ask for bonuses. When a rental property is put up for sale while you’re still renting it, chances are good that people will come to see the place every now and then. This means you’ll have to keep your property clean and ready for demonstration permanently. As it may cause distress, you have a right to negotiate your rental price and ask for a discount to cover the inconvenience. More often than not, landlords agree on that.

In Conclusion

Housing issues should not be a source of stress, but they frequently are. If you are renting a home and find out your landlord wants to sell it or even has already done that, the best you can do is stay calm and collected. No matter what people might say and what relevant horror stories they might share with you, both you and your landlord should abide by the law. And fortunately, American law is rather pro-tenant, which means you should enjoy your rights and have no worries.