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If you're renting a home, you might be wondering what happens if your landlord decides to sell. It's a valid question, especially for those living in a hot housing market. It turns out your landlord is well within their rights to sell the home you're living in. The bright spot is that certain protections apply to tenants. It varies from state to state, so understanding your rights as a renter is key. Let's review what your options are when the home you're renting is being sold by the property owner.
Can a Landlord Sell a Home They're Renting?
The simple answer is yes. The landlord owns the home they're renting out, and they're free to do with it as they wish—which includes selling it. Don't expect to be evicted the next day, however. If you have a lease that hasn't yet expired, that contract will most likely be considered legally binding. For renters on a month-to-month lease with the owner, most states require the landlord to provide tenants with 30 days' notice to vacate, according to the National Association of Realtors.
When you do decide to leave, your security deposit should be returned to you regardless of whether the property was sold to a new owner. In California, for example, landlords must return it within three weeks of the renter returning the keys and vacating the property. Just be sure to read your rental agreement closely. You could forfeit some or all of your security deposit if you violated certain rules, like making unauthorized modifications to the home, or failing to clean the property or make required repairs.
What Are Your Rights as a Renter When the Property Is Being Sold?
If your landlord wants to show the property to prospective buyers, double-check your rental agreement first. It will likely specify approved times of day for doing so, along with how much notice you should receive beforehand. The same goes for a landlord who wants access to your space to make repairs or upgrades before selling.
You can also consult your state's real estate laws regarding renters' rights. In Florida, for example, landlords are required to provide 12 hours' notice in writing for repairs, which must be completed between 7:30 a.m. and 8:00 p.m. If your landlord is showing your home without giving prior notice—or trying to make repairs early in the morning or late at night—they may be in violation of state laws.
Can You Continue Living in the Home After It's Sold?
If a new property owner steps in, that doesn't necessarily mean you'll have to move. There are a couple of different ways things could shake out if your landlord sells the property.
- The new owner wants to continue renting out the property. In this case, you should receive notice of where to send your monthly rent payments going forward. You'll also want to clarify who your contact person is should you have any maintenance or repair issues. When the lease expires, the new owner may be happy to renew it—but the terms could change. That might include higher rent.
- The new owner wants to vacate the tenants. They might take this route so they can renovate the building before moving in, putting it back on the rental market or flipping the property. If they aren't keen on being a landlord to existing tenants, their state may still require them to honor lease contracts that haven't yet expired. Beyond that point, renters may be asked to vacate.
At any rate, if you get word that your landlord is looking to sell, it's probably wise to start searching for a new place to live. Your timeline will depend on when your lease expires. If you end up finding something great before your original landlord sells, see if they're open to negotiating. They might like the idea of you vacating beforehand, which could motivate them to cancel your lease early without penalty.
Having said that, here's a quick checklist for finding a new rental home:
- Determine how much rent you can afford. Ideally, your housing payment shouldn't exceed 30% of your gross monthly income.
- Check your credit report and credit score to prepare for the application process. The minimum credit score to rent an apartment varies depending on the neighborhood and landlord, but the higher your score, the better your odds of getting approved.
- Budget for your new security deposit. The typical amount is equal to one month's rent.
- Determine if you need a cosigner. This may be required if you're apartment hunting with bad credit.
- Plan ahead for moving expenses. This includes application fees, pet fees, moving supplies, new furniture and the like.
The Bottom Line
If your landlord is selling your home, don't panic. There's a chance you'll be able to continue renting, though the terms of your lease may change. In some cases, the new owner may choose not to renew your lease when it expires. You will need to move then, but your state laws should clarify how much notice the landlord is required to give you beforehand.
Those who are looking for a new apartment should keep in mind that many landlords run credit checks on applicants. Knowing what's on your credit report—and taking steps to improve your credit ahead of time—can increase your chances of getting approved. Free credit monitoring with Experian can help you stay on top of your credit and catch potential identity fraud.
