Can a Landlord Break a Lease to Move In or Sell the Property?

Short answer: It depends.
Although a lease agreement is a legally binding contract, there are several reasons why it can be broken. While not the most ideal situation, it could be the case that your landlord needs to sell or move into the property before the lease has expired. Whether you are the landlord or the tenant in this situation, this unexpected change can be very stressful and it is important to know all of the information associated with this process. Each state has different regulations and tenant/landlord laws in place. Here are some things to consider if your landlord is trying to break your lease.

If you are on a month-to-month lease:

The freedom that you have to move out at any time with only a month’s notice is also reciprocated on the landlord’s side. Landlords generally only need a 30 day notice to evict the tenant. Just as you would need a 30 day notice to move out, the landlord reserves the same right when it comes to renewing your lease. This instability is one of the cons of signing a month-to-month lease.

If your landlord is trying to move in:

This process is called an Owner Move-In Eviction. It is completely legal in most states, as long as the landlord provides a reasonable notice (usually 60 days if the landlord wishes to move in before the lease expires). Once the tenants have vacated, it is crucial that the landlord does in fact move in to the property. The landlord (or a relative of the landlord) must use the home as their primary place of residence consecutively for at least 36 months. Otherwise, the tenant can sue the landlord for wrongful eviction and in some cases be entitled to move back into the property.

If your landlord is trying to sell the property:

Your landlord can sell their property at any point, regardless of any tenants. It is after all, their property.

Refer to your lease first, because this is something that might be mentioned. Some landlords include a “lease termination due to sale” clause, usually if they are planning on selling the property in the near future. This clause could give insight as to what will happen after the sale of the property. It could include a less-than-standard notice warning to vacate if the property is sold during the lease and could even declare the lease to end if the property is sold prior to the original end date. Be sure to have a discussion about this clause with your landlord prior to signing the lease to avoid conflicts in the future.

Asking to revisit and possibly make a change to this clause might sound like a big change to your lease, but it never hurts to ask and your landlord might be open to the discussion! In most states, even if the owner of the property changes, you can keep your original lease until it expires. However, this period of sale is your chance to renegotiate with the new property owner.

Your landlord is going to want some cooperation in order to be able to show the property in good condition and help ensure you will not speak poorly of the property while a potential buyer is present. Use this opportunity to negotiate with your landlord to create a win-win situation. Consider negotiating for a decrease in rent for the remaining months on the lease, an early move-out (this could be appealing to the new buyer as they can set their own leasing agreement with any tenants they wish to have), or even an as-is move out to guarantee that you won’t be charged for any damages.

Here are some of your rights to consider as a tenant:

• 24 hour notice before each showing
• Attendance at each showing (you don’t have to be there, but your landlord cannot prevent you from being present unless negotiated otherwise).
• Security deposit return (minus any cleaning/repair fees). Regardless of the new ownership of the property, you are still entitled to your original security deposit once you move out.
• (In some cities) a Renter/Tenant Relocation Allowance to assist in finding new housing. This is a requirement in some cities, but can always be negotiated between tenant and landlord.
• Seattle and San Francisco have been known to be especially generous in these cases!
  

What to do before moving out:

In either situation, it is important to settle any debts that you might have accumulated during your tenancy at the residence. If you are behind on rent, utilities, etc., your landlord can hand the debt to a collection agency when the lease ends (preemptively or at the original expiration date), where the debt can negatively affect your credit score and ability to rent/buy in the future.

Unless you have arranged an as-is move-out, make sure the property is cleaner than how you found it. It’s important to remember that you still need to get your security deposit back. If you can, find pictures of the property from when you first moved in as a reference and do a final walkthrough to assess any damages together with your landlord and any roommates.

Some landlords require potential tenants to have reference letters from previous landlords, so try to stay on each other’s good sides! You might need their help someday. If you enjoyed your time at their property, you could even keep in contact with them in case they have another property for rent in the future.

If you are the landlord:

First and foremost, now is an extremely important time to be reliable and communicative

with your current tenants. Before committing to anything, consult your state and local landlord/tenant laws. Although you are able to move in or sell your property, make the process seamless and conflict-free by keeping your tenants in the loop every step of the way.

If you are having trouble keeping up with all of your tenants, consider moving your operations to Tellus, where you can have all of your rental documents in one place. It is a convenient all-in-one shop for property management/investment. You can even collect rent through the app and your tenants can pay via credit cards for rewards!

For details on each state’s landlord/tenant laws: https://www.landlordology.com/state-laws/