Selling a Rented Property — Do Existing Leases Stay in Place?

Answer

Short answer: When a property sells, existing leases generally survive the sale — the buyer steps into the landlord’s shoes and must honor any valid lease until it ends or the parties lawfully agree to change it.

That means a fixed-term lease (for example, a 12-month lease) usually continues under its original terms, while a month-to-month tenancy typically transfers to the new owner subject to state notice rules. The new owner cannot normally evict tenants before the lease expires except for limited situations (a lawful eviction for cause, local “owner move-in” rules, or specific foreclosure outcomes). Tenants should keep paying rent and follow the lease’s notice and maintenance procedures to avoid disputes.

Operational details buyers, sellers and tenants should know:

• At closing: sellers commonly assign leases and transfer security deposits to the buyer; many states require written notice or an accounting to tenants about deposit transfers.
• Buyer due diligence: buyers should review the rent roll, signed leases, tenant estoppel letters and condition reports so they know rent amounts, lease expirations and deposit balances.
• Commercial vs residential: commercial leases often require landlord consent for assignment and rely on estoppel certificates; residential rules lean on state landlord-tenant statutes and local tenant-protection laws.
• Foreclosure and successor-in-interest: federal and state provisions can give tenants notice and limited protections (for example, successor owners may need to provide a 90-day notice in many foreclosure scenarios).
• Practical tools: estoppel letters, written assignment documents, and an escrow or transfer receipt for security deposits reduce later disputes.

If you’re a tenant, request written confirmation of who holds the security deposit and where to pay rent after closing. If you’re buying or selling, document lease assignments, obtain tenant estoppels, and transfer or escrow deposits according to local law. For complex or disputed situations, it’s advisable to consult a licensed attorney or a local housing agency to confirm rights, notice periods and required procedures.