Rights of California Tenants When the Landlord Decides to Sell

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Many real estate investors rent out their properties in order to reap the benefits of passive monthly income while increasing their equity and building wealth over time. Not only are they benefiting themselves financially, but they’re also serving a need for those who may not be financially or emotionally ready to buy a home.

But while renters are promised quiet enjoyment of their property, there may come a time when they may be asked to vacate the premises if the landlord chooses to sell the property to a willing buyer. As a renter, it can be disheartening to be asked to leave in order to make room for new buyers, especially if you are given very little warning.

Fortunately, California is a tenant-friendly state, and landlords must follow a certain procedure in order to lawfully sell their rental property before they can legally evict you. There are still some rights that you have as a renter that protect you in the event that your landlord chooses to sell.

Landlords Must Honor the Lease

Before the landlord makes a move, it’s essential that the terms of the lease are followed. Usually, if your landlord sells the property that you occupy, your lease won’t necessarily be terminated. Instead, the buyer of the property now becomes the new landlord and is obligated to comply with the terms of your existing lease until it expires.

That means if there are still three months left on the lease, your landlord cannot kick you out until the lease expires. Until then, the buyer will ordinarily have to assume the role of landlord until the lease term ends, after which they may or may not choose to renew your lease or keep you on as a month-to-month tenant. If not, they may ask you to vacate (with adequate notice) in order to live in the unit themselves or use the property as they see fit.

In addition, the sale of the property doesn’t have any effect on your right to get a refund on your security deposit.

Landlords Must Provide Ample Notice of the Sale

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As a renter, you are entitled to a reasonable amount of notice about the sale of your unit before a real estate agent brings a buyer for a showing. In the state of California, 24 hours is considered to be “reasonable notice” before a showing occurs on the property.

That means your landlord must inform you at least 24 hours before a scheduled showing that a buyer will be visiting the property. Written notice is not necessary as long as your landlord informed you that they plan to sell the property within the last four months.

In addition, landlords can’t just show the property at all hours of the day. Instead, they must be scheduled during reasonable times. For instance, 6am or 11pm would not be considered reasonable times to show the property. It’s best that you and the landlord come up with some type of agreement about an acceptable window of times for showings to occur.

If your unit has been shown to a buyer while you were not home, you have the right to be informed in writing that a showing took place.

Renter Relocation Allowance May Be an Option

If you’re currently renting a house that your landlord wants you to vacate early, perhaps an arrangement can be made between you and your landlord. With a “tenant relocation allowance” provision, your landlord would pay for the costs associated with house hunting, moving expenses, and other related costs.

Month-to-Month Tenants Have Fewer Rights

If you’re currently locked into a long-term lease, you have more rights compared to a month-to-month tenancy. In the case of the latter, your lease can be terminated with as little as 30 days notice. This will leave you with a limited amount of time to find a new unit and secure a lease. That said, your landlord can’t force you out by changing the locks or shutting off your water or electricity.

Voluntary Vacancy By the Tenant

While you have a right as a renter to stay put until your lease is up, you can voluntarily choose to waive your rights and leave early. Having your unit constantly visited by prospective buyers can be a nuisance, even though your landlord has a right to show the place according to the terms of the lease. It can also be a pain to keep your home in pristine showing condition at all times until a sale is made.

In this case, you and your landlord may be able to come up with an agreement whereby you vacate early, ideally with some form of compensation from your landlord.

The Bottom Line

Being told that the property you’re renting is being sold can be discouraging, but it’s helpful to know that you do have rights under California law. If your lease has not yet expired, your landlord does not ordinarily have the right to boot you out.

In the meantime, it would be wise to take the time you have left on your lease to start looking around for a new place and start making arrangements for an impending move. Your best bet is to get in touch with a real estate agent who can help get the ball rolling for you so you’re adequately prepared.