Selling a rental · California · What the code says
Selling a house with a tenant in California: the lease comes with the house.
Yes. You can sell a house with a tenant in it in California. The lease goes with the house, and the buyer becomes the landlord. A sale alone is not a reason to end the lease. You must give notice before showings, and the deposit moves to the new owner.
Reviewed 26 September 2026 · Wexmoor Circle LLC, Los Angeles
1 · The short answer
Yes, you can sell. The buyer steps into your shoes.
A lease is a contract that runs with the property. When the house changes hands, the lease goes with it.
Nothing in California law stops you from selling a rented house. What changes is the owner’s name. The tenant keeps the same rent, the same end date and the same rights. The new owner takes over your side of the deal.
That one fact shapes everything else. A buyer who wants to live in the house is buying a house they cannot move into yet. A buyer who wants a rental is buying one that already works.
This page is for landlords. It covers a rental house or a small building you do not live in. It explains what three sections of the California Civil Code say. It is general information, not legal advice. Your city may add its own rules, so check with a landlord-tenant attorney before you serve any notice.
2 · The rule most sellers miss
A sale is not on the list of reasons to end a tenancy.
Civil Code 1946.2, the Tenant Protection Act, sets the list. Once a tenant has lived there for twelve months, you need a reason from it.
The law splits the reasons into two groups. At-fault reasons are about what the tenant did, such as not paying rent. No-fault reasons are about what the owner plans to do. Section 1946.2(b)(2) lists four no-fault reasons:
- The owner, or a close family member, will move in and live there for at least twelve months in a row.
- The owner is taking the property off the rental market.
- A government agency or a court orders the tenant out.
- The owner plans to tear the building down or remodel it heavily.
“I am selling” is not one of them. So you cannot end a lease just because a sale is coming.
A no-fault reason also costs money. Under 1946.2(d), the owner must pay the tenant relocation help equal to one month of rent, or waive the last month.
And the move-in reason has a clock. The owner must move in within ninety days after the tenant leaves and live there as a main home for at least twelve months in a row.
The exemption that may apply to you
Some single-family houses and condos fall outside these rules. Under 1946.2(e)(8), the owner cannot be a REIT, a corporation, or an LLC with a corporate member. And the tenant must have been told in writing that the house is exempt. If that notice is not in the lease, do not assume the exemption covers you.
3 · During the sale
Showings need notice. The deposit needs a paper trail.
Two sections decide how the sale runs day to day. Both are short, and both are easy to get wrong.
Showing the house: Civil Code 1954
You may enter to show the house to buyers, with notice. Twenty-four hours is presumed to be fair notice.
Notice can be spoken, in person or by phone, but only if you told the tenant in writing, within the last 120 days, that the house is for sale. When you go in, leave written proof of the visit inside the unit.
So send the written “for sale” notice first. It makes every showing after it simpler.
The security deposit: Civil Code 1950.5
When you sell, you have two choices for the deposit. You can pass what is left of it to the buyer. Or you can return it to the tenant, with an accounting of any deductions.
Either way, you must tell the tenant in writing, by personal delivery or first-class mail. The notice gives the amount, any claims against it, and the buyer’s name, address and phone number.
A buyer who keeps the tenant will ask for this at escrow. Having it ready removes a reason to delay.
4 · Who buys it
Two kinds of buyer, and they price the same house differently.
The law above decides which buyer can use the house on day one. That decides the price.
The buyer who wants to live there
They need the house empty. If the tenant stays, their way in is the owner move-in reason: pay one month of rent, move in within ninety days and stay a year. Many of them will not take that on. So they offer less, or ask you to hand it over empty.
The buyer who wants a rental
They are buying the income. The tenant is not a problem to remove. The tenant is the reason the deal works. This buyer does not need the house empty, so a vacancy is not in their sum. That is how Wexmoor buys tenanted rentals.
What the rental buyer will ask you for
- The lease, and any changes to it.
- The rent ledger: what was due and what was paid, month by month.
- The deposit amount, and who holds it.
- Any notice you have served, and any written exemption notice.
We read the file before you pay for it. For a seller, that means we read the lease and the ledger first, then name a number and show how we got there. So the number does not move at escrow because of something we could have read on day one.
5 · The questions
What landlords ask most, answered short.
Each answer stands on its own. Take the one you came for.
Can I evict a tenant because I want to sell?
Not for the sale itself. After twelve months of tenancy, Civil Code 1946.2 needs a reason from its list, and selling is not on it. Taking the house off the rental market is a separate reason with its own rules and costs.
Does the new owner have to honor the lease?
Yes. The lease goes with the house. The buyer takes over your side of it, at the same rent and the same end date.
How much notice do I give before a showing?
Twenty-four hours is presumed fair under Civil Code 1954. Spoken notice works only if you sent a written “for sale” notice within the last 120 days.
What happens to the security deposit?
You pass it to the buyer or return it to the tenant, and you tell the tenant in writing either way. Civil Code 1950.5 lists what the notice must say.
Can I offer my tenant money to move out?
A tenant can agree to leave by choice, in writing. Some cities regulate these agreements and ask for set forms, so check your city’s rules before you make an offer.
Is it harder to sell a house with tenants?
It is harder to sell to someone who wants to live there. It is often easier to sell to someone who wants a rental, because the income is already in place.
Is it realistic to sell with tenants in place?
Yes, if you sell to someone who wants a rental. A buyer who plans to move in will want it empty, and the law may not let you do that. A buyer who keeps it rented prices it from the rent.
6 · Next
Selling with the tenant in place? Price it as a rental.
Wexmoor buys tenanted rentals in seven Southern California counties with its own money, and keeps the tenant.
Wexmoor Circle LLC · 930 Colorado Blvd, Suite 1, Los Angeles, CA 90041 · NMLS #2841970 · Equal Housing Opportunity · Reviewed 26 September 2026
