Landlord Obligations Arising from the Sale of Rental Property

When a unit is sold while occupied by a California renter, the renter retains certain tenant rights that must be respected. Simply selling the property does not usually justify an immediate eviction of a tenant. Here is an overview of a tenant’s rights upon the actual or contemplated sale of the property. 

Lease Provisions

As a threshold matter, any applicable provisions of the lease agreement must be followed.  If the property is sold with nine months remaining on a one-year lease, the tenant has the right to occupy the unit for the remaining nine months. He or she is still responsible for paying rent and carrying out the terms of the original lease, although rents will generally be paid to the new owner. The other terms and conditions of the lease also remain in effect until the lease expires. After the lease expires, the tenant can be required to move so that the new owner can occupy the unit or otherwise determine how to use the property.

Periodic Tenancies

For month to month leases, the renter will have fewer rights than with a longer lease. The new owner can decide to terminate the lease. However, proper notice must be given, usually 30 days in most jurisdictions. California, however, is more generous when it comes to giving month-to-month renters time to figure out their future living arrangements. In California, month-to-month tenants who have resided at the property for least a year are entitled to a 60-day notice pursuant to California Civil Code 1946.1.

Reasonable Notice for Pre-Sale Showings of the Property

Additionally, renters are entitled to “reasonable notice” before an agent shows the property. California law presumes that 24 hours is reasonable notice. Therefore, if the owner or a realtor wants to show the property, the owner must give the tenant at least 24 hours’ notice of the intent to show. The notice must be reasonably calculated by the owner to reach the renter. However, the notice does not have to be written so long as the owner has provided the renter with notice sometime in the last four months that he or she intends to sell the property.

Additionally, the renter can insist that viewings occur at reasonable times. For example, a midnight showing would likely not be considered reasonable. Determining whether a proposed showing time is reasonable depends on the particular circumstances involved in the case.

Occupying a Property that Is Foreclosed

Under federal law, the tenant is entitled to 90 days’ written notice to vacate a foreclosed property. Additionally, the buyer of a foreclosed home must honor the lease until it expires unless the buyer will be moving into the residence and using it as his or her home. If this is the situation, the tenant is entitled to 90 days’ written notice to vacate.  If the occupant is the former owner, a 3-day Notice to Vacate is required.

Independent Agreement

Although the tenant has certain rights, he or she may choose to voluntarily waive these rights by independent agreement. Renters who are inconvenienced by continuous showings may prefer to walk away from the property rather than have to keep it immaculate at all times. A landlord may agree to provide the renter with a reduced rental amount to compensate him or her for cooperating during this process. In some transactions, tenants may occupy units such as apartments, condos or other multi-level buildings that the new owner wants to demolish or renovate. In these situations, the new owner may have an incentive to buy out the lease and offer the tenant funds to vacate early. A tenant and landlord may enter into such agreements if they both choose to do so.

Lynx Legal’s representatives have substantial experience dealing with California eviction matters and the issues arising from the landlord-tenant relationship. Please contact us with any questions on the above issues, at 888-441-2355 or info@lynxlegal.com. Our experienced professionals are standing by to answer any questions you may have or if you’re ready to start a case.