If you’re selling a house with tenants in California, you’ll be guided by a range of important laws, regulations, and requirements.
The process of selling a property that comes with a renter is much more complex however, and any misstep on your part can derail your plans for a smooth sale.
Knowing when to sell rental property and having a professional California real estate investment company with the resources, experience, and insight to help you put the hassles behind you, can greatly help you speed up and smooth out the selling process.
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Selling a house with tenants California guide
If you’re ready to sell property with tenants in California, there’s a lot to consider.
To begin, you’ll need to provide your renters with notice that is in accordance with California’s renter-friendly stance. Further, you’ll need to successfully navigate the legal process while protecting your rights and bottom line.
It’s a lot, but this guide can help.
Can you sell your house with tenants in it?
If the question—Can I sell my rental property with tenants in it?—is on your mind, you’re likely interested in selling your property fairly quickly. While it’s possible to sell a rental property with tenants in tow, it requires considerable finesse.
California is considered a renter-friendly state, and the laws are exacting, which makes working with a well-established California real estate investment company an excellent way to remain within the confines of the law while getting the job done.
In California, you have the legal right to sell a house with tenants living in it, as long as you uphold the terms of the rental agreement that’s in place.
Selling a property with tenants vs asking them to leave
If you’re selling tenant occupied property and aren’t sure how to address the matter of your tenants, you have two primary options that include selling the occupied property or asking your renters to move out and waiting for them to do so before proceeding with the sale.
Both choices have pros and cons.
Benefits of selling a house with renters
The upside of selling a house with tenants includes all the following advantages:
- In a sense, your home is already staged. While you won’t be able to control how your renter prepares your place for showings, selling a place that’s furnished is easier than selling a property that’s empty, and this is simply because potential buyers generally aren’t visionaries.
- When you sell your property with tenants in it, you won’t miss out on rent payments while the house is on the market.
- A home that comes pre-filled with tenants can be more attractive to real estate investors, who may be glad to skip the hassle of arranging new renters.
The cons when you sell rental property with tenants
If you sell your rental property with tenants still living in it, you’ll need to consider the following obstacles:
- An uncooperative tenant can make showings difficult—or next to impossible. For example, a renter who refuses to keep your place looking presentable, refuses to leave during showings, or who interferes with your ability to show the place at all can negatively affect the sales process.
- If the tenant living in your property owes you rent or refuses to honor their end of the lease, it can make this process far more complicated for you and you could face a lengthy legal battle that can interfere with your closing.
You’re ready to sell your property with a tenant, but there’s a lot involved, and the potential that you’ll run into trouble along the way is all too real.
Selling an inherited house or investment property with tenants is a mixed bag that comes with a high margin of unpredictability and challenging legal guidelines.
Generally, the path forward is far more direct without tenants in residence, which makes reaching out to a professional real estate investment company a great place to start.
How to sell a house with tenants: 3 primary options
If you’re selling a home with tenants, you have options, and better understanding these options can help you make the right choice for you—given the unique circumstances involved.
1. Selling a rental property with a tenant to us!
The most straightforward, least complicated and expedited means of selling your home with tenants in it is turning to a professional California real estate investment company.
At SoCal Home Buyers, we help homeowners like you who’re trying to sell quickly—without all the hassle and stress, but with their rights and best interests intact.
We’re invested in the simple idea of “selling made simple”, and when it comes to selling your rental property with tenants, it doesn’t get much simpler than selling it for cash in just a few days to us.
The steps forward include:
- Requesting a cash offer for your house with a tenant by simply entering your contact information and the address of the property you’re interested in selling on the form provided.
- Wait for a prompt call from us, in which we’ll gather more information and schedule your home’s inspection.
- Our in-house inspector will conduct a thorough, one-time inspection of your property and will make our best offer on the spot.
- If you like our offer, you simply choose the best closing date for you, and we’ll get to work making that happen.
When you sell to SoCal Home Buyers, you bypass the headaches generally associated with selling a home with tenants in place.
But don’t take our word for it.
Here’s what Bonnie and Charlie M. had to say about our process:
2. Selling a rental property to tenants
The tenants who’re already renting your place may be interested in buying it. In fact, if they make you a fair offer, it can save you both a considerable amount of time, energy and resources.
Once you make up your mind to sell property with tenants, letting your renters know and affording them the opportunity to make an offer emphasizes your good faith efforts, which can go a long way toward alleviating tensions and keeping things moving forward smoothly—regardless of the house-selling option you choose.
3. Waiting until the lease is up
Another option is waiting until your tenants lease is up.
At that time, you’ll face no selling constraints, but waiting out the lease may not suit your plans if the goal is to sell my house fast in California.
Some landlords incentivize their renters to leave by sweetening the deal.
For example, offering to cover a month’s rent, paying for their moving costs or helping in another way may entice them to break the lease.
How long do tenants have to move out after a house is sold in California?
If you’re putting your home on the market and it has renters living in it, there is the obvious matter of wrapping the landlord-tenant relationship up as efficiently as possible.
The circumstances of your sale will be unique to your property and situation, and how long you’ll need to allow your tenants for moving out post-sale will hinge on several factors.
Tenants rights when the landlord sells property in California
As mentioned, California has some of the most tenant-friendly laws in the nation, which means you need to keep the following in mind—What rights do tenants have when the house is being sold in California?
If you intend to sell investment property that tenants occupy, it’s important to recognize they have robust rights you’ll need to observe.
- The provisions spelled out in the lease are legally binding, and upholding the contractual obligations outlined in your lease should be your primary concern.
- Even renters who do a month-by-month basis have important legal rights, and in California, they’re owed at least 60-day notice of leave. Further, landlords are prohibited from taking actions designed to encourage tenants to leave, such as cutting off the utilities, changing the locks or engaging in any other form of shenanigans.
- Renters have the right to reasonable notice in relation to showing the property they live in. This is addressed as a right of possession, and it holds that property owners cannot enter rentals without the tenant’s permission.
- When it comes to showing a property, there is a 24 hour notice to enter California rule, which means tenants are entitled to at least 24-hours of notice prior to any showing. Oral notice before a showing generally suffices, as long as the renter was previously informed of the property sale. Renters also have the right to expect landlords to reasonably limit the number of showings and conduct them at reasonable times.
- Tenants have the right to be informed in writing after a property showing.
- When a property is foreclosed in California, all tenants are entitled to written notice to vacate that is at least 60 days in advance of their removal.
- Renters in California are entitled to voluntarily waive their tenant rights via independent agreement. For example, a tenant may become weary of the inconvenience associated with numerous showings and choose to walk away. Sometimes, landlords incentivize a tenant’s cooperation. As long as both parties are in agreement, such arrangements are legal.
You have the absolute right to sell your property as quickly as you can in California, but remaining within the parameters of the law is paramount. By selling to a professional real estate investment company, you may be able to bypass the legal hassles while speeding up the process—a win-win from all perspectives.
Call Now to Learn More: 951-331-3844
Selling a rental property with tenants on a lease vs month to month
The process of asking an existing tenant to leave prior to selling a rental house hinges on the kind of lease you have in place and the amount of time that’s left on the lease.
If you have a fixed-term lease in place and it doesn’t include an early termination clause, the matter is more complicated.
Your tenant has the right to continue living on the property without interruption until the end of the lease—as long as they uphold the lease agreement, including continuing to pay their rent.
While it’s your right to begin the process of selling your rental, you can’t trample on your tenants’ rights or expect them to move out early based on your convenience.
If, on the other hand, you have a month-to-month lease, things are more flexible. It’s important to note, however, that laws related to California rentals also protect the rights of month-to-month tenants—who are owed at least a 60-day notice for lease termination.
Typically, vacating a rental property is based on just cause, which refers to a legal reason for requiring a tenant to vacate a rental property, and can be either fault based or no fault.
Fault-based just cause in California
Prime examples of fault-based just cause include:
- The tenant breached the lease terms
- The tenant was delinquent in relation to payment of rent or otherwise made a nuisance of themselves
- The tenant engaged in illegal activity in the rental property
- The tenant refused to allow you entrance—after you afforded them proper notice
- The tenant sublet your investment property—in violation of the lease agreement
Just because you have just cause in relation to a tenant, however, does not absolve you of responsibility. In some situations, landlords are required to allow renters the opportunity to remedy any errors prior to making them vacate.
No-fault just cause in California
There are situations in which property owners who want to sell have just cause to vacate a property, even if their tenants didn’t engage in any lease violations.
Examples of this no-fault just cause include:
- If you or the property’s new owner decide to occupy the dwelling, it serves as just cause to vacate and can even preempt a valid lease agreement. The same is true if you or the new owner’s spouse or domestic partner, child, grandchild, parent or grandparent intends to move in.
- If you plan on removing the property off the rental market entirely—for any reason—it can serve as just cause for giving notice to vacate.
- If you plan on demolishing the property for a new build or making substantial renovations, it can qualify as no-fault just cause.
- If California’s evolving laws deem your property no longer habitable, it’s a form of no-fault just cause for tenant removal.
If you do proceed vacating your rental property in accordance with no-fault just cause, you are not only required to notify your tenants, but are also required to either waive their final month’s rent or provide them with a one-time payment of relocation assistance that is equal to one month’s rent.
If, on the other hand, the just cause is based on fault, this payment is not a concern.
Without just cause
If you don’t have just cause for requiring your tenant to move in advance of sale and they have lived at your property for more than 12 months, it’s time to revisit your lease agreement.
Some leases include language that allows early termination. This generally comes at a price, but such clauses can prove invaluable.
If there’s no way around the lease agreement and you have no just cause, your best option may be waiting out the lease. You can re-frame this as an opportunity to prepare the property for sale. It’s also important to give your tenants notice of at least 60 days before they’ll be required to leave.
Landlord notice to tenant to vacate due to sale
Letting your tenants know about your decision to sell the property they rent involves providing a notice of intent to sell property.
California laws protect renters from capricious landlords, and mandated notice requirements are central to these protections.
120-day notice to sell rule in California
If you’re selling rental property with tenants, you’re obligated to provide them with ample warning of your intent.
In California, this means you must provide your renters with written notice of your decision to sell the property at least 120 days—or roughly 4 months—before you can begin showing the place.
After this requirement has been met, you’ll need to give your renters at least 24-hours of verbal notice prior to every showing.
30 or 60-day notice to tenant of sale of property
California is committed to protecting the rights of renters, thus tenants are generally entitled to at least 60 days notice in relation to the sale of the property they reside in. This is true even for renters with month-to-month arrangements, except when they’ve lived there less than a year.
Free sample letter to notify tenant of sale of property
If you’re preparing to sell your property, being organized is key and a primary requirement is your letter to notify the tenant of the sale of property. Such letters need to be straightforward and clear, and there are a range of elements that need to be addressed. We offer a 120-day notice to sell California template as an example of what you’ll need to cover and how best to do so.
What to do if a tenant refuses to leave when a house is sold in California?
If your tenants are digging in their heels and refusing to leave with the sale of your house, it’s important to know that you have legal rights, but finding a peaceable solution will reduce stress, time, and expense.
Your options toward this end include all the following:
- Strike the right balance—It’s important to be firm with your tenants, but also to be unfailingly polite. If your renters are willing to take an aggressive stand, like refusing to budge, you don’t know what they’re capable of and it’s best that you don’t find out.
- Inspect the property early on—Before notifying your tenants that you’ll be selling, it’s important to inspect your property for wear and tear, as well as for any damage, and to inventory what belongs to you. Taking clear pictures is generally the best practice, and doing so may inspire your renters to be on their best behavior.
- Be aware of lease violations—The best means of freeing yourself of tenants who are bent on causing trouble is through evictions based on lease violations. While leases vary considerably, most include stipulations related to illegal drug use, property maintenance, subleasing and long-term guests.
- Be mindful of illegal activity—Only if an activity is illegal can you use it as a means of eviction if it isn’t otherwise stipulated on your lease. If you are suspicious of illegal activity and your tenants know you’re on to them, it could work in your favor, as they are unlikely to want the police involved.
If you choose to sell to a professional real estate investment company, you can leave your challenging tenants in their capable hands.
Call Now to Learn How We May Be Able to Help: 951-331-3844
Tips on selling rental property with tenants ethically and legally
If you’re planning on selling an investment property with tenants, you’re bound by California’s strict laws, but you also want to proceed ethically.
Your tenants, after all, are facing considerable stress of their own.
How to tell tenants you are selling the house
Keeping your renters informed of your intention to sell is the right thing to do. To begin, it helps to bolster the trust you’ve built between you. In turn, this helps ensure your tenants continue taking excellent care of your property throughout the process.
If it’s time to tell your tenants that you plan on selling, keep all the following in mind:
- Consider telling your tenants in person, as a means of preparing them for written notice.
- Give ample notice that, at a minimum, comports with the law.
- If you know your renters will need to move, such as if the new buyers are planning on moving in, be honest about this fact.
Some additional helpful hints related to selling your rental property with tenants include:
- Treat your tenants with the respect they deserve, and remember you benefit from them in a range of important ways that include maintaining your property, paying rent, alerting you to problems and beyond.
- Keep your tenants in the loop as you move through the sales process—no one wants to be blindsided.
- If you can’t wait until your renters’ lease is up and don’t have just cause for vacating, engage in fair negotiations that honor your tenants’ rights.
Selling a rental property with tenants? We Can Help!
If you’re interested in selling a rental property that comes with tenants, you have options and we’re well prepared to help you explore them.
Our Simple Process Includes:
- Give us a call at 951-331-3844—or fill out the short form below—to request your fair cash offer.
- Await our prompt response to discuss your property in greater detail and schedule a one-time inspection that allows us to offer the highest amount possible.
- At the time of the inspection, our in-house inspector will quote you a fair cash offer, and if you’re on board, you can consider your home sold!
- Choose your closing date, and leave the rest to us. You can choose payment via check or money order. It simply doesn’t get any easier.
Can I sell my house with tenants in it?
You can sell your house with tenants in it, but you’ll need to do so within careful legal guidelines that include providing your tenants with a notice of sale of property. Dealing with tenants makes the sale of a house more complicated, but a real estate investment company can help.
Can I evict my tenant in California if I want to sell?
You can only evict your tenants in California if you have just cause for doing so and you go through the proper legal channels. Just cause can either be fault based, such as if your renters breached their lease, or no fault, such as if you’re planning a major renovation.
If tenants are impacted by the sale, are there financial incentives or assistance programs in California?
Under some circumstances, landlords are required to provide displaced renters with financial incentive, such as a month’s rent, and the State of California also offers a range of federal and state grants and funding in specific situations—creating rental opportunities for a wide range of Californians.