The property owner landlord will often decide to sell the rental unit occupied by a tenant.  Many legal issues arise when this occurs. 

Please see the below Q & A

DOES THE LANDLORD HAVE A RIGHT TO SELL THE UNIT OCCUPIED BY A TENANT?  

Yes.   Unless specifically prohibited under the terms of the lease, the landlord has a right to market, show and sell the property occupied by a tenant.    

DOES THE OWNER NEED TO DISCLOSE AN INTENTION TO LIST THE PROPERTY FOR SALE PRIOR TO THE LEASE BEING EXECUTED?  

No.   However, it is recommended that the landlord be up front with a tenant if the owner intends to list the property, particularly if the owner intends to list the property early in the lease term.   

WHEN THE LANDLORD LISTS THE HOME FOR SALE, DOES THE OWNER NEED TO FORMALLY NOTIFY THE TENANT?  

No, but it will still generally be advisable to let the tenant know in some way that the rental unit is officially on the sales market.     

IS THE TENANT LEGALLY ENTITLED TO A RENT REDUCTION IF THE RENTAL PREMISES IS ACTIVELY BEING SHOWN FOR SALE? 

No.   However, if the landlord is trying to gain the tenant’s cooperation for frequent showings, offering some type of compensation may be something to consider.  

IS THERE ANY LIMIT TO HOW MANY TIMES THE PROPERTY CAN BE SHOWN WHEN OCCUPIED BY A TENANT?  

 

There is no specific limit under Florida law, but the showings cannot equate to harassment of the tenant or be unreasonable. A judge could determine reasonableness so you must be very careful.     

THE RENTAL UNIT IS PROFESSIONALLY MANAGED, BUT A DIFFERENT BROKERAGE HAS THE SALES LISTING, CAN THAT AGENT ACCESS THE RENTAL UNIT WITHOUT THE TENANT BEING PRESENT?   

Probably.  If reasonable advance notice is provided by the landlord, the sales agent will likely have the right to access the premises.  If access is refused by the tenant, you would contact us.        

CAN THE LANDLORD PLACE A LOCKBOX ON THE PREMISES FOR THE PURPOSE OF SHOWINGS OR CONDUCT AN OPEN HOUSE IN A TENANT OCCUPIED UNIT?  

If the tenant agrees to a lockbox on the premises, the landlord or agent would be allowed to do this. We strongly discourage this practice as it can create serious liability to the landlord and the property manager.

CAN THE LANDLORD REQUIRE THE TENANT TO TEMPORARILY VACATE WHILE THE PROPERTY IS BEING SHOWN OR INSPECTED?  

No, unless the tenant specifically agrees to this in writing. 

CAN THE TENANT DENY ACCESS FOR SHOWINGS DUE TO THE COVID-19 PANDEMIC? 

Some judges may believe that a tenant has a right to prohibit or severely limit showings while a pandemic state of emergency remains in effect, particularly if the tenant or an occupant is immunocompromised or in some other way in an “at risk” category.    While a pandemic state of emergency is in effect, masking and social distancing are still recommended when showing a rental unit.  

DOES THE LEASE AUTOMATICALLY TERMINATE IF A CONTRACT FOR SALE IS REACHED ON THE PROPERTY, OR IF THE PROPERTY IS SOLD?  

No.  The lease interest will survive the closing, unless the lease contains language allowing the landlord to terminate the lease early upon specified notice if a contract for sale is executed, or if the sale is finalized, and this early termination right is exercised.    

 

IS THE NEW OWNER REQUIRED TO HONOR THE LEASE? 

Yes.  The purchaser acquires the property subject to the existing lease interest.    Unless the lease contains language allowing the new owner to terminate the lease early in the event of a sale, the new owner must honor the terms and conditions of the existing lease through the lease expiration date.    

CAN THE NEW OWNER REQUIRE THE TENANT TO SIGN A NEW LEASE? 

No.   Upon acquiring title, the new owner can offer a new lease, but the tenant is not required to sign a new lease.   

WHAT HAPPENS TO THE SECURITY DEPOSIT AND ADVANCE RENT WHEN TITLE CHANGES?

Upon title changing with the tenant occupying the rental premises, Florida law requires that the security deposit and advance rent be turned over to the new owner with an accurate accounting.  

THE PROPERTY IS BEING PROFESSIONALLY MANAGED, AND THE NEW OWNER IS RETAINING THE CURRENT PROPERTY MANAGEMENT COMPANY; IS NOTICE TO THE TENANT REQUIRED?   

After title changes, it is a good idea to notify the tenant in writing that a new owner has acquired title, but that the management company will continue to manage the property, collect rent and receive notices as usual.  The property management company should also enter into a new management agreement with the buyer after title changes.   

A BUYER ACQUIRING A PROPERTY WITH A TENANT IN PLACE WANTS A MANAGEMENT COMPANY TO HANDLE THE ACCOUNT, AND THE SELLER DID NOT HAVE A MANAGEMENT COMPANY MANAGING THE PROPERTY; IS ANY NOTICE REQUIRED?  

After title changes, three different notices to the tenant are in order: (1) notice from the new owner confirming the title interest and directing the tenant to deal with a specified management company, (2) notice from the management company confirming its management role and providing contact information, and (3) notice as to where the deposit money and advance rent (when applicable) will be held.     

THE PROPERTY IS BEING PROFESSIONALLY MANAGED AND THE NEW OWNER IS NOT RETAINING THE PROPERTY MANAGEMENT COMPANY; WHAT NOTICE OBLIGATION DOES THE PRIOR MANAGEMENT COMPANY HAVE?

After the title transfers, the prior management company will notify the tenant it will no longer be managing the property, that the security deposit and advance rent (when applicable) will be turned over to the new owner, and that all future rent payments and notices should be directed to the new owner. 

 

THE TENANT IS SCHEDULED TO VACATE A FEW DAYS AFTER THE PROPERTY IS SET TO CLOSE AND CURRENTLY OWES THREE MONTHS OF RENT; CAN THE

PRESENT OWNER RETAIN THE DEPOSIT AGAINST THE UNPAID RENT?   

 

No.   The deposit money must be turned over to the new owner if the tenant is still in possession at the time of closing. All of this, including any prorated rent that may be due the buyer or seller should be handled at the closing.   

DOES THE LANDLORD NEED THE TENANT’S PERMISSION BEFORE TRANSFERRING THE SECURITY DEPOSIT AND ADVANCE RENT WHEN TITLE CHANGES?

No.   The law mandates the turnover of this money without reference to the tenant’s permission.      

RENT IS DUE ON THE 1^ST, AND THE PROPERTY IS CLOSING IN THE MIDDLE OF THE MONTH; AS BETWEEN THE BUYER AND THE SELLER, WHO IS ENTITLED TO RECEIVE THE MONTHLY RENT? 

Absent a specific agreement in the sales contract, the new owner is entitled to rent proceeds on a prorated basis from the point of obtaining title.  This should be handled at the closing.

WHAT IF THE TENANT IS NOT COOPERATING WITH SHOWINGS OR INSPECTIONS?   

It may be possible to set up an eviction when the tenant is not cooperating with showings or inspections related to the attempted sale of the home.   However, this will be an uphill battle requiring a paper trail establishing that the tenant is unreasonably blocking access.   If the lease is soon to expire or has expired, non-renewing the tenancy will usually be a better option than trying to force a 7-day eviction case based upon denial of access.     

THE LANDLORD WANTS TO DOCUMENT THE INTERIOR OF THE UNIT WITH PHOTOS FOR THE SALES LISTING, BUT THE TENANT IS OBJECTING, CITING PRIVACY AND PERSONAL PROPERTY CONCERNS; IS THIS A LEGITIMATE OBJECTION?  

Maybe.   The photo shoot should strive to limit images of the tenant’s personal property, particularly if the tenant is objecting.   It is hard to gauge how a court will react to an invasion of privacy claim.   If this is anticipated, the landlord should address this issue in the lease.              

WHAT IF AN EVICTION IS UNDERWAY WHEN THE CLOSING OCCURS? 

This is not an ideal situation, but the new owner will typically have the right to finalize the eviction case in progress under the prior owner’s name.  

 

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