Disclaimer: This article is intended for informational purposes only and does not constitute legal advice. California landlord-tenant law is complex and subject to change. Consult a licensed real estate attorney before taking any action that affects existing tenants.
The Sale Does Not End the Lease
This is the rule that catches sellers off guard: a property sale does not terminate an existing lease.
When a multifamily property sells in California, the new owner steps into the seller's shoes and assumes all obligations under every existing lease — rent amounts, move-out dates, lease terms, and security deposit responsibilities. The sale itself is not grounds for eviction. Buyers cannot change lease terms or ask tenants to leave simply because ownership changed.
Fixed-Term Leases vs. Month-to-Month Tenancies
The type of rental agreement in place determines how much flexibility a seller — and a buyer — actually has.
Fixed-Term Leases: Tenants are entitled to remain through the end of the lease term regardless of the sale. The new owner must honor the full agreement.
Month-to-Month Tenancies: The new owner can eventually terminate the tenancy, but California law requires:
- 30 days notice for tenants in residence less than one year
- 60 days notice for tenants in residence one year or more
For properties covered under AB 1482, additional just cause protections apply once a tenant has been in place for 12 months or more.
AB 1482: What Bay Area Sellers Need to Understand
The California Tenant Protection Act of 2019 — AB 1482 — applies to most Bay Area multifamily properties built more than 15 years ago. For covered properties, once a tenant has occupied a unit for 12 months or more, the landlord must have a legally recognized just cause to terminate the tenancy.
A sale alone is not just cause. Allowable no-fault just causes under AB 1482 include:
- Owner or qualifying family member move-in
- Withdrawal of the unit from the rental market
- Substantial remodel requiring vacancy
- Compliance with a government order
Whether your property is covered depends on the year it was built, its ownership structure, and the city where it is located. Local ordinances in cities like Oakland, Berkeley, San Jose, and Hayward often provide stronger protections than state law. Where both apply, the stricter rule governs.
Relocation Assistance Requirements
When a no-fault just cause eviction is initiated on an AB 1482-covered property, the landlord is required to provide relocation assistance equal to one month's rent — paid within 15 days of serving the notice — or waive the final month's rent in writing.
Many Bay Area cities require significantly more under local ordinances, with amounts varying based on tenant length of occupancy, income, age, or disability status. Sellers in rent-controlled markets should confirm local requirements with a real estate attorney before initiating any tenant transition.
Showing the Property During the Sale
Tenants do not have to vacate during the listing and sales process. Under California Civil Code Section 1954, sellers and their agents must provide at least 24 hours written notice before entering for showings, and showings must occur at reasonable times.
Sellers who communicate transparently with tenants during the listing process consistently see fewer delays and smoother closings. Tenants who are informed and treated respectfully are far more likely to cooperate.
Cash for Keys: A Voluntary Option
When a buyer needs a unit vacated — for an owner move-in, repositioning, or renovation — both parties may negotiate a voluntary buyout, known as cash for keys. Key points:
- Tenants are never required to accept a buyout offer
- The agreement must be in writing
- In San Francisco and some other cities, tenants have the right to rescind within a set window after signing
- Buyout amounts are negotiable and typically reflect the gap between current and market rent
Cash for keys should never be used as a pressure tactic. Sellers should consult legal counsel before initiating buyout conversations in any rent-controlled market.
What to Do Before You List
Before going to market with a tenant-occupied property, sellers should:
- Identify the tenancy type and length of residency for each unit
- Determine whether AB 1482 applies to the property
- Review local ordinances for the city where the property is located
- Consult a real estate attorney before issuing any notices or initiating tenant conversations
- Partner with a multifamily broker experienced in tenant-occupied transactions
The R&Z Group works with multifamily investors across the Bay Area — from duplexes to 100+ unit apartment communities — and brings the market knowledge and transaction experience to navigate tenant-occupied sales from listing to close. Sellers are informed of their obligations before going to market, not after a problem surfaces in escrow.
FAQ
Can I ask tenants to leave before selling my apartment building in California?
Not without legal grounds. A sale alone is not just cause under California law. Sellers must follow proper notice requirements and, for AB 1482-covered properties, have a legally recognized just cause to terminate any tenancy where the tenant has been in place for 12 months or more.
Does a new buyer have to honor existing leases?
Yes. The new owner assumes all existing lease obligations at closing — rent amounts, lease terms, move-out dates, and security deposit responsibilities all transfer.
What is relocation assistance and when is it required?
Under AB 1482, no-fault just cause evictions on covered properties require one month's rent in relocation assistance, paid within 15 days of serving the notice. Many Bay Area cities require significantly higher amounts under local ordinances.
Can I show my property to buyers without notifying tenants?
No. California law requires at least 24 hours written notice before entering an occupied unit. Showings must occur at reasonable times, and tenants are protected from excessive or disruptive access.
If you're looking to sell a multifamily property in San Jose, Oakland, Redwood City, San Mateo, Burlingame, Daly City, Hayward, Palo Alto, Menlo Park, Santa Clara, Sunnyvale, Berkeley, or Concord — or anywhere across the Bay Area and beyond — The R&Z Group is the multifamily real estate broker built for investors who expect results. Whether it's a duplex or a 100-unit apartment complex, from maximizing your sale price to navigating a 1031 exchange into a stronger-performing asset, we bring local market expertise, financial precision, and a proven track record to every transaction. Contact us today to discuss your multifamily investment goals.
Contact The R&Z Group:
Ray Rodriguez | (650) 405-0743 | Lic# 01999734
Tony Zizzo | (650) 770-8356 | Lic# 01962093
