Q: I want to sell my rental property but I have a tenant living there. They are in a one-year lease that doesn’t terminate until June. Can I break the lease because I am selling the property?
A: No, you cannot break the lease at the time of the sale unless your lease specifically states otherwise. You may want to speak to the tenant and ask if they would be willing to break the lease, or offer to buy them out of the lease. You may sell the property tenant-occupied, try to negotiate an earlier termination date, or try to buy the tenant out of the lease. Selling a property tenant occupied limits the number of buyers willing to purchase the property. The buyer would most likely be an investor or a person willing to wait until the lease has expired to move into the property. Regardless, if the tenant will not agree to move before expiration of the lease term your buyer will have to honor the lease.
Q: I plan on selling my rental property in the City of San Diego. My tenant is on a month to month agreement. What notice do I serve my tenant to get them out before I sell?
A: You will need to serve one of the following: a 30 Day Notice to Quit, a 60 Day Notice to Quit, a 60 Day Notice to Quit with Cause, or a 90 Day Notice to Quit with Cause.
- If the tenant has lived in the unit for less than one year you will need to give the tenant a 30 Day Notice to Quit.
- If the tenant has been in the property for more than one year but less than two years you will need to give the tenant a 60 Day Notice to Quit.
- If your tenant has rented the property for more than two years you must give the tenant a 60 Day Notice to Quit with Cause. In the City of San Diego, tenants that have occupied a unit for longer than two years are entitled to know why the landlord is terminating their tenancy under the Tenants Right to Know Ordinance (San Diego Municipal Code Chapter 9, §98.0730). The Tenants Right to Know Ordinance specifies the grounds or permissible causes which you may use to terminate the tenancy. If you do not have grounds under the Tenants Right to Know Ordinance, you cannot serve the notice. The grounds are as follows: 1) nonpayment of rent; 2) violation of obligation of tenancy; 3) nuisance; 4) illegal use; 5) refusal to renew lease; 6) refusal to provide access; 7) correction of violation; 8) withdrawal of unit from the rental market; and 9) owner or relative occupancy.
- If your tenant receives Section 8 housing, then you must give a 90 Day Notice to Quit with Cause.
Knowing which notice is proper to serve in your situation can be difficult and if your notice is even slightly incorrect you will have to correct it and re-serve it before you can file your eviction. If you are thinking about selling your property and serving a Notice to Quit, you should contact an attorney’s office to make sure you serve the proper notice and that you have the proper language in your notice.
Q: I am selling my rental property and have already opened escrow. The buyers just informed me that they do not want to keep the tenant who is on a month-to-month rental agreement. What type of notice do I serve?
A: You may serve a 30 Day Notice to Quit if all of the following conditions apply:
A) You entered into a contract to sell the rental property to a natural person(s);
B) The buyer intends to reside in the rental property for at least one year following the
termination of the tenancy in the property;
C) You opened escrow with an escrow company licensed by either the Department of
Corporations, Department of Insurance or a licensed Real Estate Broker;
D) Escrow was opened 120 or fewer days prior to the delivery of the notice;
E) Title to the Premises is separately alienable from any other dwelling unit (i.e., it is a single
family home or condominium); and
F) The tenant has not previously been given a notice of termination of tenancy.
Q: I am selling my property with my tenant still living there. What do I do to show the property to buyers?
A: It is difficult to schedule showings around a tenant. You must give the tenant at least 24 hours’ notice of your intent to show the property to prospective buyers. If, within the past 120 days, you or your agent has notified the resident in writing that the property is for sale, then you may give the 24 hours’ notice of your intent to show orally, in person, or by telephone. However, you cannot force the tenant to allow you access to show the property. If the tenant will not give you reasonable access to show the property, then you will need to contact an attorney’s office for further direction. Additionally, the landlord has the right to hold an open house while the property is tenant occupied. The landlord should speak to the tenant to find an agreeable date and time for an open house. When dealing with situations such as these, try to work with the tenant’s schedule and hopefully, they will be reasonable in providing access to help you get the property sold.
Q: My rental property is in escrow and the new owners are keeping the tenant. Do I need to give the security deposit back to the tenant?
A: No, the security deposit and rental agreement will transfer to the new owner. You should transfer the funds you are holding for the security deposit to the new owner through escrow. The security deposit is to be handled in accordance with California law after the termination of the tenancy. The new owner will take over the agreement that was previously signed. It will be the new owner’s responsibility to inform the tenant of the change in ownership and to appropriately handle the security deposit once the tenant moves.
Attorney Franco Simone, of Simone & Associates and The Landlords’ Legal Center has been doing evictions for over 20 years. He is also an adjunct law professor at the University of San Diego. Mr. Simone’s office is open Monday – Friday from 9:00 AM to 5:00 PM. Tel: 619-235-6180, website: www.landlordslegalcenter.com or email firstname.lastname@example.org.