Question: I just found out my landlord is selling my rental house – what does this mean for my housing situation?
Answer: If you rent a home and you discover your landlord is selling the property, don’t start panicking (or packing) just yet. If you signed a lease agreement, your current and future landlord will have to honor the terms.
TERM LEASE AGREEMENT
A term lease agreement is a housing agreement between landlord and tenant for a designated amount of time, typically 6-months to one year. If you learn about the sale of your rental property, and you still have a few months left on your lease agreement, your new landlord will not be able to kick you out.
When a buyer purchases a renter-occupied home, he must agree to take over the lease and honor the terms the tenant signed. A buyer can ask the renter to sign a new lease with him, but technically the tenant does not have to.
EXCEPTIONS TO HONORING A TERM LEASE
The only exception would be if your lease agreement has special conditions regarding a property sale. If your state allows it, your lease could contain language that says something along the lines of, “in the event of the sale, the current lease agreement will be void once a new owner takes over the property”. While it is possible that your lease could have this type of property sale clause, they are not very common.
Another exception would be if you and your landlord mutually agree to end the lease agreement, and you agree to move out on a designated date. In these cases, the tenant can have some leverage to ask for relocation fees from the landlord, since you are doing them a favor by moving out.
MONTH-TO-MONTH LEASE AGREEMENTS
If your current lease agreement is a month-to-month tenancy, you have less security when it comes to staying at the property during a sale.
If your landlord wants you to move out prior to an official sale, he merely has to provide you with proper notice to end tenancy and move out on a specified date. Most states require a landlord to give a tenant anywhere from 30-60 notice informing a tenant that tenancy will end and they need to move out. Some cities have even more lenient timelines, for example, landlords in Portland, OR, must give their tenants 90-days notice to vacate.
Remember, these notices to vacate are not evictions. They are friendly terms of ending a rental tenancy with your current landlord. While it can be shocking to learn you have to move, that is one of the realities of being a renter, your landlord can choose to sell his rental property at any time.
HOW TO HANDLE THE SALE PROCESS
Talk to your landlord. Hopefully, your landlord will be upfront about his intentions to sell the property and keep you informed as to whether he hopes to sell to another investor who will keep the property as a rental. He could be selling the property for any number of reasons, and the more friendly you are during the process, the more likely he will be to encourage the new buyer to keep you as a long-term tenant.
WORKING WITH A REAL ESTATE AGENT
A potentially frustrating part of living in a rental that is in the process of being sold is dealing with showings, inspections, and any property upgrades seller decides to complete the sale. These types of typical selling activities can be a huge disruption to a renter who wants to live in peace.
A lot of tenants feel uncomfortable with the idea of strangers constantly coming through their homes during open houses and showings. Unfortunately, there is little a tenant can do to complain about this part of the process. Your landlord must give you 24 hours notice (or whatever the notice requirement for your state is) before a real estate agent, inspector, or anyone shows up and enters your property – but he does not have to accommodate your request to always be present during these events. Try to work with your landlord to come up with a solution where you feel comfortable and your landlord is still able to sell his home. Remember the more accommodating you are during the sale process, the faster it could be sold and this whole ordeal will be over.
It is not acceptable for a real estate agent to just show up and enter the property unannounced. They must provide advanced noticed according to your state laws for entering the property. If this keeps happening, you need to speak with your landlord so he can relay the laws to the agent who may be unaware.