With the current state of the market, it’s not uncommon for a tenant to be given notice that the owner is selling the rental property they are living in and be told they will have to vacate in the near future. I would say about 1/3 of our prospective tenants looking at rental properties right now are in this position. It’s important to understand what your rights are as a tenant, and as an owner, in this situation.
Tenants
For tenants, if you are currently in a lease, you can relax knowing that that lease term will stand. For example, if your lease doesn’t expire for another 6 months and the owner is telling you they want you out so they can sell the house, you can rest assured knowing that you do not have to move before your lease is up. If the owner decides to sell and that process is completed while you’re still in the home, it would just mean that the new owner would become your new landlord once escrow closes.
Owners
For owners, the process is a bit more complicated right now because of COVID-19, but they can still list the property for sale. If the tenant is in a lease, as mentioned above, the lease would stand until it expires and the new owner would just take over. However, if the tenant is month-to-month, and the owner of a single-family property or condo is in contract to sell to a buyer who will take occupancy, and the appropriate notice of exemption has been integrated into the rental agreement, then that will constitute a legitimate “no-fault” reason for providing a termination of tenancy notice. (Because of the complexity of the current laws, we always recommend reaching out to a local real estate attorney to find out the best way to proceed with your rental property and tenant.)
Showings
Once the property has been listed for sale, the Realtor will provide you with proper notice before any scheduled showings of the home. Typically, this is 24-hours, but it’s possible to work out a showing schedule ahead of time that works best for you and the Realtor to accommodate both your schedules. Just know that it’s a requirement of the lease agreement to allow a Realtor to show the home, should it be listed for sale. Ideally, you can work out certain days and times that are accommodating to both of you.
Close of Sale
Once the sale has closed escrow, if the tenant is still in possession due to a lease agreement, they will remain in possession until the expiration of the lease term. From the date of close of escrow on, the new owner will become the landlord, unless they hire a property manager. The previous property manager or landlord must notify the tenant of the change in management by providing the name, address, phone number of the new landlord and how and where rent payments should be made. Ideally, the new landlord will reach out and confirm this information, introduce themselves and also advise the tenants how maintenance requests or any other issues should be handled. The smoothest transactions are a result of open and honest communication.
Transitioning from one home to another is never easy and can often be stressful, especially if it is unexpected. Remember, it’s not a personal decision for the owner to have you move out, but an investment decision. There is always a possibility of the tenant being able to purchase the home, as well. If not, it may mean there is something else better out there for them.
