In the world of real estate, it’s not uncommon for landlords to decide to sell their properties. This situation can be stressful and leave you wondering about your rights as a renter and what steps you should take next. Read on to learn more about your options and rights when your landlord decides to sell the home you’re living in.
The Landlord’s Right to Sell
As holders of the property rights, landlords are entirely within their legal right to sell their real estate holdings, which could include the home you’re currently renting. However, this doesn’t mean you can be abruptly displaced. If you have a valid lease agreement that hasn’t expired, it will generally be recognized as legally binding.
Contrary to popular belief, tenants on a monthly agreement also have rights. Most jurisdictions require landlords to provide their tenants with a notice of at least 30 days to vacate the premises. The specifics may vary, so it’s vital to understand your local laws.
Your Security Deposit and Rental Agreement
Your landlord is legally required to return your security deposit, minus any necessary repairs or cleaning costs, after you move out. The exact timeline varies by state, but it’s typically between 14 to 60 days.
However, it’s essential to read your rental agreement carefully. You could risk losing part or all of your security deposit if you violate certain rules, such as unauthorized modifications to the property or failing to carry out necessary cleaning and repairs.
Your Tenant Rights During the Sale Process
The landlord may want to show the property to potential buyers. However, they should respect your rights during this process. Your rental agreement will likely specify the approved times for property showings and the amount of notice you should receive.
Likewise, if the landlord wants to access your space for repairs or upgrades before selling, they should follow the guidelines outlined in your agreement and local laws. For instance, in Florida, landlords must provide a written notice 12 hours in advance for repairs, which must be done between 7:30 a.m. and 8:00 p.m.
What Happens After the Sale?
The sale of the property does not automatically mean you have to vacate the premises. The new property owner might be interested in continuing to rent out the property. In such a case, you should receive notice of where to send your monthly rent payments. However, upon lease expiration, the new owner may want to renegotiate the lease terms, which could include higher rent.
Alternatively, the new owner may want to vacate the tenants for various reasons, such as renovating the home or flipping the property. If this is the case, they may still be required to honor existing lease contracts that haven’t expired.
Preparing for a Move
If you receive information that your landlord intends to sell, it would be wise to start looking for a new home. Here are steps to follow when searching for a new rental home:
- Determine how much rent you can afford. Your housing costs should ideally not exceed 30% of your gross monthly income.
- Check your credit report and credit score. Ordering your credit report and score will prepare you for the application process as landlords often run credit checks on applicants. You can get all three reports for free when you visit AnnualCreditReport.com.
- Budget for a new security deposit. The security deposit is usually one month’s rent.
- Determine if you need a cosigner. It might be necessary to add a cosigner if you have a poor credit score.
- Plan for moving expenses. Some of your expenses will include application fees, moving supplies, new furniture, and more.
When Do You Have to Move Out?
The legal requirement for vacating the property depends on your lease agreement. If you have a month-to-month lease, most states require a 30-day written notice. However, if you have a fixed-term lease (for a year or two), you have the right to stay until your lease ends, regardless of the property’s sale. The lease is tied to the property, not the owner, so the new owner must respect the existing agreement.
Lease Termination Due to Sale Clause
Your lease agreement might contain a “lease termination due to sale” clause. In this case, the terms stated in the clause apply. For instance, if your lease has eight months left, but your contract states that the lease termination due to sale is 30 days, then you have 30 days to vacate the property.
Tenant Relocation Allowance
In some rare cases, your landlord might be obligated to pay a relocation allowance to get you to vacate the property. However, this is not a standard requirement and depends on the specific circumstances and local laws.
Your Rights During the Sale Process
While the property is for sale, your rights as a tenant remain intact. Your landlord cannot threaten eviction or cut off your utilities. They also cannot enter your home unannounced (except in emergencies) or cause disturbances like late-night repairs.
The Bottom Line
If your landlord decides to sell your home, don’t panic. You might be able to continue renting, although the terms of your lease may change. In some cases, the new owner might choose not to renew your lease when it expires. In such scenarios, your state laws should clarify the notice period the landlord must provide.
Editor's note: This article was produced via automated technology and then fine-tuned and verified for accuracy by a member of GOBankingRates' editorial team.
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