What Happens If My Landlord Sells the House During the Lease Contract Period?
Laws governing the relationship between landlord and tenant protect tenants against unfair eviction, abuse of security deposit cash and other abuses. While these laws vary by state, California legislation, which specifically addresses the rights of tenants when their landlords sell their buildings, offers among the very liberal protections in the country.
Your Own Lease
A lease is a written contract between a landlord and a tenant. The landlord agrees to permit the tenant to occupy the property for a predetermined period of time. In return, the renter agrees to pay the landlord a particular amount of money for your occupation and enjoyment of their space. The terms of the rental are binding on the two parties for the whole period that the lease specifies. Most leases are in effect for a year. If no time period is specified, it’s assumed the property has been rented on a month-by-month basis.
The Terms of Your Lease Remain Intact
The new owner of this property is bound by the rental, in the same way the prior owner was. According to the Fair Housing Council of Orange County, some leases contain a clause that allows the landlord to modify the terms of the lease throughout the rental period, but this type of change requires notification of the renter and agreement by the tenant so as to be enforceable.
Security Deposit
When the home is sold, the current landlord should either refund the tenant’s security deposit or transfer the deposit to the building’s new owner. When the security deposit is refunded to the renter, the new landlord may require that the tenant make a new deposit. The amount of security deposit allowed is limited by law and depends on the tenant’s rent amount and duration of occupation. The new landlord may not request more security than the renter paid to the old landlord.
Conversion of Lease Units to Condominiums
Investors frequently buy rental properties with the intent of converting the units into condominiums. If your landlord plans to convert your rental, she has to offer you the very first right of refusal for the buy: in other words, it needs to be provided to you at fair market value before it is sold to somebody else. Note that at San Francisco, according to the San Francisco Tenants Union, buildings with over two or more than six rental units might not be converted into condominiums.
Estoppel Agreements
The San Francisco Tenants Union warns that new landlords of newly purchased buildings occasionally ask existing tenants to sign an estoppel agreement in which the renter describes his understanding of the conditions of his lease and some oral agreements created with his old landlord. This agreement subsequently becomes binding: Terms included should be abided by, and terms excluded by omission might no longer be binding. Tenants can’t be forced to sign an estoppel agreement.