Your landlord sold the building — what happens to your lease?

A tenancy is not a personal arrangement with a particular human being. It is an estate in land — a slice of the ownership carved out for a period. The seller can only sell what is left, which is the property subject to your lease. That is why the sale changes almost nothing: rent, term, repair obligations, notice periods and deposit liability all pass to the buyer in one piece.

Why the sale does not touch your lease

The buyer does not get to plead ignorance either. A tenant visibly in possession puts a purchaser on notice of whatever rights that tenant has, recorded lease or not: a buyer who never asked is treated as having asked. In practice they do ask, which is why a sale announces itself before the completion letter does.

The tell is an estoppel certificate: a short form asking you to confirm the rent, the term, the deposit held and whether anyone is in default. Its purpose is what the name says — what you certify is conclusively presumed true between you and the buyer, so a wrong figure signed in a hurry is one you are stuck with. Read it against the rental agreement first; if your lease does not require one, signing is voluntary.

A foreclosure sale is not an ordinary sale

Priority is decided by recording order. If the mortgage was recorded before your lease began — nearly always, because the owner borrowed to buy the building — your leasehold is junior to it, and foreclosing a senior interest extinguishes the junior ones. Commercial tenants answer this with a subordination, non-disturbance and attornment agreement: the lender promises not to disturb a paying tenant, and the tenant agrees to treat the new owner as landlord. Residential tenants are almost never offered one.

What they have instead is the Protecting Tenants at Foreclosure Act, covering foreclosures on federally related mortgage loans and on any dwelling or residential real property. It does two things. The successor in interest takes subject to any bona fide lease entered into before the notice of foreclosure, for the remainder of its term. And every bona fide tenant, lease or none, must get a notice to vacate at least 90 days before its effective date.

"Bona fide" is a real test. The tenant must not be the borrower or the borrower's child, spouse or parent; the tenancy must be arm's-length; and the rent must not be substantially below market, unless a subsidy reduced it. The one exception to the term surviving is a purchaser who will occupy the property as their own primary residence — and even they must give the 90 days.

States layer their own rules on top, often with a clearer remedy attached. California gives a periodic tenant in possession at the foreclosure sale 90 days' written notice to quit, lets a fixed-term tenant stay to the end of the term, and puts the burden on the purchaser to prove an exception. Check your state before assuming the federal floor is also the ceiling.

The clause that lets a sale end your lease anyway

Some leases contain a sale-termination clause: if the landlord sells, either party — usually the landlord — may end the tenancy on a stated period of notice. These are legitimate, and common in single-family rentals where an owner wants the option to sell with vacant possession. They are easy to miss, because they sit under a heading about the landlord rather than under termination.

Three things matter if you find one: whether it is mutual or landlord-only, how much notice it requires (frequently more than the statutory minimum), and whether it bites on the contract of sale or on completion, which can be two months apart. The pre-signing checklist covers where it hides.

Who is holding your deposit now?

This is where money actually goes missing, and the mechanism is dull: the seller keeps the deposit, the buyer never receives it, neither thinks they owe it. Most states have legislated against exactly that, more protectively than tenants expect.

• California requires a landlord whose interest ends by sale either to transfer the remaining deposit to the successor, with written notice naming them, or to return it with an accounting. Where the outgoing landlord fails to comply, the successor is jointly and severally liable with them for repayment.
• Florida requires deposits and advance rent to be transferred on a sale, with earned interest and an accounting, and releases the seller only once the new owner acknowledges receipt in writing. A rebuttable presumption says the new owner received the deposit, capped at one month's rent.
• New York makes the grantee liable for any deposit it has actual knowledge of, whether or not the seller handed it over — and knowledge is deemed where the deposit sat in a bank in the six months before closing, or was acknowledged in a lease in effect at closing. Absent such a record, the new owner must ask you within 30 days, and you then have 30 days to produce evidence.

Whatever the state rule, do the same thing: ask the new owner in writing to confirm the sum they hold, and keep the reply. It settles an argument that otherwise surfaces during the deduction dispute at move-out.

Can the new owner raise the rent straight away?

Not during a fixed term. The rent is a term of the lease the buyer inherited, and buying the building confers no power to vary a contract binding you both. A sale is not a fresh start: it does not reset the term, restart the tenancy for the purposes of a rent cap, or create a new anniversary date.

On a month-to-month tenancy the new owner has the old one's power under the old one's constraints: the statutory notice period, the correct method of service, any state or local cap. If a notice arrives in the first weeks after a sale, check it against the ordinary rent increase rules and the form of a valid rent increase notice. New owners get service wrong more often than established landlords.

Why signing their "new lease" is the expensive move

A new owner will often send a fresh tenancy agreement, described as a formality for their system. Signing it surrenders whatever is left of the old term and replaces it. Everything the new document does not repeat is gone: the remaining months, the rent figure, any concession the previous owner agreed, the notice periods you negotiated. Nobody flags this in the covering email.

You are not obliged to sign. The inherited lease is enforceable against the buyer for its full term, and declining breaches nothing. The polite version: you are happy to update contact and payment details in writing, and will keep the existing agreement until it expires.

Where the rent goes while nobody has told you anything

The gap between completion and anyone writing to you is where avoidable defaults happen. Keep paying. A tenant who stops because they are unsure who the landlord is has created an arrear, and the confusion is not a defence. Pay whoever last gave you valid instructions, traceably.

The obligation to tell you sits on the new owner. California gives a successor owner or manager 15 days to supply their name, address and payment details, and one who has not complied cannot serve a non-payment notice or evict for rent accruing during the non-compliance, though the rent stays owed. Most states have a version of this duty. It is the one new landlords most reliably forget.

What actually changes

For most tenants the honest answer is: the bank account, and eventually the person who answers the phone. The lease binding a new owner is the lease the old one signed, and every situation that breaks that rule is findable in advance — a clause you can read, a mortgage on the recording index, a deposit you can pin down with one email. The risk in a sale is rarely the sale. It is the paperwork afterwards, asking you to agree something else is true.