Selling a tenant-occupied property the right way

Selling a rented home generally doesn’t cancel the lease. The buyer steps into your shoes as landlord and has to honor the lease until it ends.

In Massachusetts, for example, the security deposit statute makes a tenant’s advance payment of rent binding on every later owner, and a buyer can become responsible for the deposit.¹

That means you can sell with the tenant in place to a buyer who wants the rental, or wait until the lease ends, or agree with the tenant on an earlier move-out.

If you want the house empty and the tenant is month-to-month, the notice you must give depends on your state. Local rules can be stricter.

Florida requires not less than 30 days’ notice before the end of any monthly period.²

New York requires 30, 60 or 90 days’ notice before not renewing a tenancy, depending on how long the tenant has lived there or the lease term, whichever is longer.³ In New York City, in rent-stabilized units and in towns that adopted Good Cause Eviction, a landlord may not be able to refuse renewal at all, and a sale is not a ground for removal.

California generally requires 60 days’ notice once a tenant has lived there a year. It allows 30 days in some sales to a buyer who plans to live there, but only when several conditions are met, and its just-cause rules can still apply.⁴

Massachusetts requires the longer of 30 days or one rental period for a tenancy at will.⁵

In California, a landlord may enter to show the home to buyers with written notice, and 24 hours is presumed reasonable.⁶

Florida lets a landlord enter to show the home to prospective buyers, within the limits of its entry rules.⁷

In New York, the seller must turn the deposit over to the buyer at the deed transfer or within five days, and tell the tenant by registered or certified mail.⁸

Massachusetts requires the deposit, with interest, to go to the new owner. The state says the new landlord is responsible for returning it whether or not they received it.⁹

Under the Massachusetts statute, failing to transfer a deposit can lead to damages of three times the deposit, plus interest, court costs and attorney’s fees.¹

New York City’s rent stabilization generally applies to buildings of six or more units built between February 1, 1947 and December 31, 1973, plus some others.¹⁰

Florida bars local governments from imposing rent controls.¹¹

Missouri bars counties and cities from regulating the amount of rent.¹²

California’s statewide law caps rent increases at 5 percent plus inflation, or 10 percent, whichever is lower, and requires just cause to end a tenancy after 12 months, but exempts some housing, including many single-family homes owned by individuals and housing built in the last 15 years.¹⁴ A buyer who plans to move in or renovate should check whether those rules apply to your unit.

We found no statewide law in the states we cover that gives a tenant the right to buy the home first in an ordinary sale.

Cash-for-keys is a voluntary written agreement: the tenant moves out by a date in exchange for money. It is a negotiation, not an eviction.

Self-help eviction is generally unlawful. In Missouri, removing a tenant without a court order, or cutting off essential utilities, is forcible entry and detainer.¹³

• Copies of every lease and any side agreements.
• A rent roll: rent, due dates, deposits held, lease dates and any arrears.
• A deposit accounting that matches your state’s transfer rule.
• A tenant estoppel certificate confirming rent, deposit and lease terms, if the tenant agrees or the lease requires it.
• Any notices served and any pending eviction case.