Legal Question in Real Estate Law in California

Re: selling a property with renters in it

You can sell it, but the new owner would take it subject to the rental agreement. If the buyer wants it vacant, then you might include the cost of evicting and relocating the tenant (and buying out the tenant's lease), as well as attorney's fees, as part of the price.

Re: selling a property with renters in it

You can sell it, but the sale will not affect the tenants' rights. The buyer will become their new landlord.

This happens all the time with large apartment complexes, shopping centers and office buildings. Who would want to buy an income property that was vacant? With single-family homes, the buyer usually wants to occupy it, making the sale of a tenant-occupied property more difficult, but it can be done, both legally and marketwise.

In rare instances, leases will contain a provision allowing termination of the lease upon a sale of the premises, but unless you inserted such a provision in your tenant's lease, it will remain in effect notwithstanding a sale.

One other item; if you do sell, there are statutory provisions for handling the tenant's security deposit; you can either refund it and then the tenant will (if the lease requires a deposit) have to give a new deposit to the new owner; or, the new owner can assume the obligation to refund the deposit at the end of the tenancy. See Civil Code section 1950.5(h).

Re: selling a property with renters in it

You can sell it subject to the rental agreement (i.e. in escrow, the buyer agrees to take over as the new landlord). Also, you can consider negotiating with the tenant to terminate the lease early. For instance, offer to pay their first/last somewhere else in return for relieving you of the rental agreement obligations. You should have an attorney look at the lease/rental agreement to see if there are other options for early termination.

Re: selling a property with renters in it

So you know you can sell now but with complications because the buyer takes the property subject to the lease. Our CA attorney can assist you in handling this; he focuses no real estate law and was a CA broker before studying law. NanceGroup.com