Investors do what investors do. And sometimes that means they’re going to sell the property you live in.
This can feel like a stressful situation. BUT…You still have rights as a tenant.
If you ever find yourself in this predicament the information below will help you to navigate your options and legal rights while occupying the property.
Do You Have to Move Out Immediately?
The typical answer is: No, you don’t necessarily have to move out.
If you have a fixed-term lease (e.g., 12-month), you can usually stay until the lease ends. Your lease is a legally binding document that clearly outlines your allowable use of the property and your time-bound tenancy. The new property owner is purchasing the investment and taking on the previously documented tenant leases.
If you are in a month-to-month lease, or if your lease has expired and defaulted to month-to-month, most states require landlords to give 30 days’ notice (some areas require 60 days). If the new owner chooses not to renew your M2M option, although not ideal, it still leaves you some time to find new accommodations.
However, the requirements are state-specific. Be sure to check your state and local municipality laws to ensure that you are not surprised. If it is still unclear, be sure to reach out to legal council for an explanation.
Your Lease Stays in Place (ish)
A lease is tied to the property, not the owner. The new owner or landlord must honor the original terms of your lease, even in a M2M agreement. You shouldn’t have to worry much until your lease expiration date.
UNLESS your lease has a “Lease Termination Due to Sale Clause”. If your latest lease has this clause the new owner is permitted to terminate your lease early, typically with a 30-day notice.
Tenant Rights During the Sale Process
The property owner puts a sign in the yard, now what!? Don’t worry, you still have basic tenant rights while living there.
Just as the laws state during “normal” tenancy, landlords cannot:
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- Enter without proper notice (unless it’s an emergency).
- Cut off utilities like water or electricity.
- Conduct late-night remodeling that disrupts your living conditions.
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If you feel like your rights are violated, contact a tenant lawyer or local housing authority to report such activities.
What Happens to Your Security Deposit?
Barring any tenant damage to the property, your landlord must return your security deposit after you move out. In most states, this deposit changes hands from the previous owner to the new owner’s responsibility at the time of sale.
Typically, landlords have 14-60 days to refund deposits after you vacate (state-specific). To ensure that you receive the deposit that you deserve it is recommended that you:
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- Clean the rental and document its condition.
- Do a walk-through with your landlord if possible.
- Provide a forwarding address in writing.
In Summary:
In most cases, tenants have the right to stay until their lease ends. This typically isn’t an emergent situation. Take a breath…whew!
We recommend that you know what’s in your lease agreement and tenant laws specific to your area so that you are informed in the event a violation of your rights occurs.
Keep in mind, however, that even if you must move, you can protect your security deposit and navigate the process with confidence.
Bullet Points Summary
- Fixed-term leases allow you to stay until the lease expires, even if the property is sold.
- Month-to-month leases typically require 30-60 days’ notice to vacate.
- Check for a “lease termination due to sale” clause in your rental agreement.
- Landlords cannot violate tenant rights during the sale process (e.g., entering unannounced or cutting off utilities).
- Security deposits must be returned within 14-60 days after move-out, depending on state laws.