What Are My Rights as a Tenant if the Landlord Sells My Place?

You love your apartment, you pay rent on time, and the thought of moving is a total headache. And then—cue horror movie music—your landlord sells the building. Thankfully, you have rights.

So, can your landlord break a lease in order to sell the property? And what exactly are a tenant’s rights when their landlord sells their place?

TL;DR

• The specific rights you have will depend on the details of your lease agreement.
• If you have a fixed-term lease (generally for 6 months or a year), the new owner will likely have to honor the remaining lease terms.
• The big exception is if your lease contains a “lease termination due to sale” clause.
• Month-to-month tenants are still owed proper notice before being forced to move (30, 60, or 90 days, depending on where you live).
• Rent-controlled and rent-stabilized tenants have additional rights.

All tenants have options in this scenario, regardless if you have a year-long lease agreement or a month-to-month lease. 

This doesn’t mean that your landlord can’t sell their property if they want to. But it does mean that you shouldn’t be left scrambling for a  new place to live at the last minute.

Here’s what we’ll cover:

• When do you have to move from the rental property?
• What happens if you have a fixed-term lease?
• What happens if you have a ‘lease termination due to sale’ clause?
• What if you have a month-to-month lease?
• Can the new owner buy you out?
• Are you required to help show the property to prospective buyers?
• What happens to your security deposit?
• What if your place is rent-controlled or rent-stabilized?

When do you have to move from the rental property?

First of all, it is important to note that tenant rights vary from state to state, or even city to city. It is always a good idea to look up your rights in the state you reside in before entering into a rental agreement.

That being said, one of the factors in determining when you have to move out of a rental property is your contract (aka, your lease). Local laws may determine what your contract is allowed to contain, and what it isn’t.

What happens if you have a fixed-term lease agreement?

A fixed-term lease agreement is a rental contract for a specific amount of time, often 6 months or a year.

In general, if a landlord sells a rental property while a fixed-term lease agreement is still valid, the new owners must honor the terms of that lease agreement. 

So even if you find yourself with new landlords three months into your one-year lease, you will still have another nine months to either find a new place to live, or negotiate a new lease with the new property owners for the next year.

Additionally, during the sale process, you might be asked to sign an estoppel certificate. This document verifies the terms of your lease—like rent amount and lease duration—for the new owner, ensuring that both you and they understand your rights and obligations under the current lease agreement.

What happens if you have a ‘lease termination due to sale’ clause in your term rental agreement?

The rental market is hot, and it can be tempting to sign your lease ASAP, without giving it the proper attention. That’s how sneaky little clauses like this one might come back to haunt you.

A ‘lease termination due to sale’ clause is one to watch out for. If your rental contract contains this clause it means that your landlord can terminate your lease with the sale of their property. This means that the new landlords do not have to take over the terms of your remaining lease.

It should be noted that even if the clause appears in your lease, your landlord must still give you the legally mandated amount of proper notice: either 30 day notice, 60 day notice, or 90 day notice, depending on where you live.

In addition, you can often negotiate the terms of this ‘lease termination due to sale’ clause before signing the contract with your landlord—or ask them to remove it altogether, which will leave you more secure should they sell their property.

What happens if you have a month-to-month lease agreement?

If you are renting a property on a monthly basis, things are slightly different.

In this case, your contract is unlikely to have a ‘lease termination due to sale’ clause, because your landlord must give you proper notice (again, either 30 day notice, 60 day notice, or 90 day notice, depending on where you live).

So if you are renting a property on a monthly basis it is a good idea to have a look at your local tenant rights ordinances so you know how much time you have to make new living arrangements if your landlord sells your place. 

What should renters know if the landlord or new owner attempts to “buy them out” of their apartment or home?

In some cases, especially if you are on a fixed-term lease rental agreement, your landlord may try to “buy you out” or offer a lease termination payout in exchange for the termination of your existing lease before its designated end date. ‘

In some cities, such as Portland, Oregon, landlords are actually required to pay a relocation fee.

It should be noted, that regardless of state laws, you don’t have to accept your landlord’s offer to buy you out. If you are considering it, don’t be afraid to negotiate and ask for a more impressive sum. 

Your landlord isn’t allowed to threaten you with eviction, nor withhold mandated maintenance to the property in order to force you to vacate a property before the end of an agreed-upon rental contract.

Are you required to show the home or apartment to prospective buyers?

Once your landlord has decided to sell their property they will likely want to begin showing it to prospective buyers either in person or through a real estate agent. 

Tempting as it might be, you’re not allowed to barricade the doors, blare loud music, and refuse to have the property shown to any new owners. But you are entitled to some considerations:

• You are entitled to 24 to 48 hour notice before the property is shown to potential buyers, or at the very least “reasonable notice” (this is something that can be ironed out between you and your landlord before they begin to show the property)
• The same advance notice rule holds for inspections, appraisals, repair work, or any other required visit when the property is on the market
• Your landlord must also be sure to show the apartment or home at reasonable times—so not at 10 pm, or 6 am
• You have the right to be present at the property while it is being shown or inspected
• You’re not required to clean or otherwise prepare your home for being shown

What happens to your security deposit?

Your right to get the security deposit back at the end of your lease remains regardless of whether the property you are renting has been sold or not. 

This means that the new property owners are obligated to return your security deposit. It’s your money, after all—provided you’re not vacating the apartment with huge holes in the ceiling, or a spray painted mural of Sponge Bob Squarepants on the bedroom wall. 

What happens if you live in a rent-controlled or rent-stabilized property?

Rent-controlled and rent-stabilized properties aren’t incredibly common. In fact, some states have made rent control illegal. 

However, if you live in certain places in California, New York, New Jersey, Maryland, Minnesota, or Oregon, you may be lucky enough to find yourself living in a rent-controlled or rent-stabilized apartment.

That means there’s certain limitations as to how much your landlord can raise the rent year over year, as well as additional tenant’s rights.

In New York City, for instance, living in a rent-stabilized or rent-controlled apartment makes it fairly tough for a new owner to evict you once your lease term is up. 

But the new owner could still claim that they (or a family member) need to move into your apartment, among other tactics. And certain behaviors on your part could leave you vulnerable to eviction, regardless of having a rent-stabilized place.

There’s no one-size-fits-all answer here, but it certainly helps to research the laws in your particular city (or even to contact a lawyer for further assistance).

Before we go…

No one likes having their living situation turned upside down. Finding the right apartment is a struggle, and starting the process all over again is no one’s idea of fun. (But hey, if you’re looking to pack your bags and get a clean start—here’s our list on some of the best cities for young professionals in all of America.)

Now that you have a better idea of your rights, and also an idea of how to handle any disputes with your landlord—have you considered renters insurance? It won’t stop your landlord from selling your apartment, but it’ll come in handy if your valuable stuff is ever damaged by things like kitchen fires or burst pipes—not to mention if your bike or computer is stolen.

Click below to get your Lemonade Renters quote in just a few minutes.

A few quick words, because we <3 our lawyers: This post is general in nature, and any statement in it doesn’t alter the terms, conditions, exclusions, or limitations of policies issued by Lemonade, which differ according to your state of residence. You’re encouraged to discuss your specific circumstances with your own professional advisors. The purpose of this post is merely to provide you with info and insights you can use to make such discussions more productive! Naturally, all comments by, or references to, third parties represent their own views, and Lemonade assumes no responsibility for them. Coverage may not be available in all states.