Landlord Selling Your Rental Home? Know Your Renter’s Rights
If your landlord suddenly decides to sell your rental home, explore the important things you need to know about your renter's rights!
Keyword(s): renter's rights
While there is some evidence that the housing market is starting to cool, median home prices suggest otherwise. In the United States, median home prices hit a new record of $405,000 at the end of March. Home prices are up nearly 27% since March 2020, when the Covid-19 pandemic started.
The U.S. Federal Reserve is raising interest rates to combat inflation. As a result, mortgage applications are now declining. This has led to an environment where property owners want to sell at peak prices.
This leaves renters in a tough spot. Read on to learn about a renter's rights when the landlord decides to sell. Explore topics such as tenants rights and what to do if this happens to you.
Can a Landlord Break a Lease to Sell the Property?
The answer to this question is complex and depends on the laws in the state you reside in. Of course, there is nothing in federal or state law that prevents a property owner from selling. However, there are state laws that protect tenants from becoming homeless.
Most states have laws that require landlords to provide at least 30 days' notice before a tenant has to vacate the property. In some cities like Seattle, advanced notice requirements increase to 60 days.
If you are on a month-to-month lease, advanced notice requirements are your only protection. Many renters sign fixed-term leases for 6 months, 1 year, or more.
In these cases, the landlord has to honor your lease. If they sell the property, the new property owner inherits the rental agreement. They are legally required to let you finish the lease.
What Is a Lease Termination Due to Sale?
Some savvy landlords put language in the rental agreement that allows them to break the lease. In specific, you should look for a clause called lease termination due to sale.
Here, the landlord inserts legally binding rules that govern the sale of their property. Since the landlord drafts the rental agreement, this clause typically allows breaking the lease when a property sale goes through.
If you do not carefully read your rental agreement before signing, you may not have any rights to fall back on. Our recommendation is to carefully review the lease before signing.
This clause often gives the tenant a set number of days to vacate if a property sale occurs. This number of days is negotiable and can be extended. By negotiating this clause, you can afford your family more time to plan and vacate the premises.
Another option is to investigate local tenant allowance rules. If a landlord breaks the lease early, some cities and states require landlords to provide financial consideration. This helps the tenant find and pay for a new property to relocate to.
Knowing Your Renter's Rights When a Landlord Sells
You are now prepared in the event that your landlord unexpectedly sells your home. At a minimum, you have the right to advanced notice with at least 30 days to prepare.
In some cases, the new landlord may have to honor your lease in full. If you have any questions about renter's rights, contact us today to speak with an expert.