Landlord Basics: Notifying Tenants of the Sale of Your Property

By E-Renter Tenant Screening
Posted on January 14, 2011 under Landlord Paperwork and Forms, Landlord Tips | icon: commentBe the First to Comment

tenantscreeningblogIf you’re a landlord who is selling your rental property, here are some guidelines for notifying your tenants. Laws and regulations vary according the city and state where you live, so check yours for specifics.

  1. Double-check your lease, which may or may not address the sale of the property. Many large apartment building change hands without the tenants knowing, but for single family residences, small buildings and duplexes, it’s more difficult to show and sell a property without tenants knowing something is going on.
  2. If a tenant asks what’s up, be honest. Reassure them that the new owner will welcome them as tenants. Do what you can to avoid losing any tenants before the sale is final.
  3. It’s not generally required that you notify tenants that the building is going on the market. However, if you need entry to a unit to show a potential buyer, follow the standard notification period you use before entering a tenant’s unit.
  4. Remember that happy tenants are a big selling point. Try to avoid numerous interruptions and make an attempt to accommodate the tenant’s schedule.
  5. Most questions you receive will be regarding security deposits. Let tenants know if you and the buyer decide to:
  6. a. refund all security deposits so new owner can collect them anew;
    b. transfer existing security deposits to the new owner.

  7. When the sale is completed, send a notification to each tenant with the effective date that you will no longer own the building or accept rent payments. Ideally, this would arrive at the same time as a letter from the new owner, directing tenants where and to whom to send rent payments.
  8. State laws vary, but in general, once the sale is completed, the new owner is obligated to honor all existing leases. Whether they do or not—or whether tenants wish to continue with the lease or not—is no longer your problem.

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