Selling or renovating a rental property can be particularly complicated when it’s occupied by tenants. Learn about your rights to sell and renovate here.
What you will discover:
Can a landlord evict a tenant to sell the property?
What are the tenant’s rights if a landlord decides to sell the property?
Can a landlord evict a tenant to renovate the property?
Are there alternatives to eviction if the landlord wants to renovate the property?
Whether you are deciding to stop being a landlord or to upgrade or adjust your rental property portfolio, it can be harder to sell or renovate a property with a tenant in it. You may need to do both, as renovating can help raise the selling price, and often more buyers are interested in unoccupied turnkey properties. If you are thinking about asking your tenant to move out so you can sell or renovate your property, here is what you should consider.
Can a landlord evict a tenant to sell the property?
As a general rule, a tenant has the right to stay in a rental property until the end of their Lease Agreement. When someone buys a home with a tenant in it, they become the landlord. The original lease terms usually continue until the Lease Agreement expires unless both the landlord and tenant agree to make changes.
Selling the property might give either the seller or the buyer a special legal right to cancel a tenant’s lease or evict. The right to cancel the lease or evict could be due to state or local law, or the Lease Agreement. Many leases have a home selling clause, or some other contract term, that allows a seller or buyer to cancel in the event of a sale. The law usually requires a 30 or 60 day notice to the tenant if they will be required to leave.
When legally allowed to cancel the lease due to a sale, the tenant must receive proper notice, and the tenant usually must move out by the end of the notice period. If they do not, you may be able to evict them after providing an Eviction Notice. To prepare for an eviction, an Eviction Process Worksheet can help you organize the information you will need.
What are the tenant’s rights if a landlord decides to sell the property?
When a landlord decides to sell a property, the tenant typically keeps all of their rights under the lease or the law. The tenant may be entitled to all of the services and amenities required by the lease while they are still on the property. The lease usually cannot be changed without the tenant’s agreement.
A landlord normally does not required to let the renter know they are preparing to sell. For example, if the property is being sold to another landlord who intends to keep the tenant, the new landlord can usually just tell the tenant when the sale is final. Then they can explain who to pay rent to or call for maintenance.
Local law or the lease may require notice to the tenant before any showings or pre-sale inspections that involve their unit. This is often in the part of the lease that requires a landlord to provide notice before entering for repairs, maintenance, or other reasons.
If a seller or buyer is asking the tenant to move out before the end of the lease, they must usually give them a specific written notice that complies with the lease and state or local law. Notice of the sale by itself is not enough since the tenant normally has the right to stay until the end of their lease, even after a sale. These are unique situations where both buyers and sellers can benefit from asking a lawyer for help.
Can a landlord evict a tenant to renovate the property?
Whether there is a plan to sell, or not, landlords often want to update and remodel their properties. When remodelling without selling, in areas with strong renter protections, it can be difficult to remove a tenant, even temporarily for renovations. The tenant generally has the right to quietly enjoy the home until their lease ends. After a lease ends, and a Notice of Non-Renewal has been provided, evicting a tenant who refuses to leave so you can renovate may be possible.
Even if a tenant’s lease is expiring, some areas require landlords to offer tenants a chance to renew the lease. This can make it hard for you to plan to renovate between tenants if the tenant wants to stay after their initial lease ends.
If you plan to remodel before selling, you might be able to require the tenant to move out due to the sale. You can ask a lawyer or check your local laws to see if a buyer has to already be in place or not. Also, the landlord should carefully write everything down about their efforts to sell the property. If the sale does not happen and the tenant sees you renting the property to a new tenant, they may say that you never really intended to sell the property and sue for wrongful eviction.
Are there alternatives to eviction if the landlord wants to renovate the property?
If a landlord wants to renovate a property with a tenant in it, there are several choices:
Inquire whether the tenant is willing to end the lease early. For example, the landlord might pay moving costs and let the tenant stay without paying rent for the last month or two.
Move the tenant into another unit for the time being.
Permanently move the tenant into another unit.
For a partial renovation on a larger unit, see if the tenant will agree to stay in a portion of the unit and pay a discounted rental rate during the work.
