Your tenants' leases transfer to the new owner. Tenancies continue on the same terms. Rents stay where they are. Rent control protections stay intact. Just-cause eviction requirements stay intact. The sale itself is not a cause for termination or change in tenant obligations. For most tenants, the only practical change is who their landlord is and where rent gets sent. For most sellers, this means a sale can happen without fundamentally disrupting the residents of the building.
California Civil Code Section 1956 and related provisions protect tenancies from being terminated solely because a property is sold. The lease is an obligation that runs with the building, not with a specific owner. When title transfers at close, the new owner steps into the landlord's shoes under every existing lease. For LA City RSO-covered buildings, the RSO protections transfer to the new owner along with the building. The tenants' rent levels, their just-cause protections, and their registration status are unchanged by the ownership transfer.
Cannot: evict tenants simply because of the change in ownership. Cannot raise rents beyond what the lease and applicable rent control regime permit. Cannot change lease terms mid-term on long-term leases.
Can: enforce existing lease terms, charge the allowable annual rent increase on the schedule the prior owner would have been entitled to, manage the property in accordance with applicable law and existing lease obligations, pursue at-fault termination for cause (non-payment, lease violation) per the same standards the prior owner would have.
Can, with restrictions: pursue no-fault termination for specific legally-defined reasons (owner move-in, substantial remodel, Ellis Act) — each carrying relocation assistance obligations and regulatory requirements that don't disappear because the property changed hands.
There is no universal obligation to notify tenants of a pending sale. Practically, most sellers do communicate — either before escrow opens, during due diligence (when buyer inspections require access), or at close (to inform tenants where rent should be sent). The communication is usually straightforward: the building is being sold, their tenancies are not affected, the new owner will provide contact information after close, and rent should continue to be paid on schedule. Some sellers prefer to communicate earlier (to give tenants time to process the change); some prefer to wait until close (to avoid alarming tenants unnecessarily during a transaction that might not close). Either approach is workable. The right choice depends on the seller's existing relationship with the tenants and the specific transaction dynamics.
Different buyer types pursue different post-acquisition strategies:
Institutional and value-add buyers often implement capital improvement programs and operational changes. Some of this is seamless for tenants; some involves tenant communications, buyout offers, or no-fault terminations where allowed. Local operators and family offices often run buildings in continuity with the prior owner's pattern — minimal operational changes, preserved tenant relationships.
1031 exchangers buying for stabilized income typically favor continuity — they want the rent roll they underwrote, not a disrupted rent roll. For sellers who have relationships with their tenants and care about continuity, matching the buyer type to the desired outcome is a real variable in the decision.
Pre-close, the seller's main tenant-facing responsibilities are accurate disclosure (rent roll, tenancies, any known issues), coordinating buyer access for inspections within reasonable-notice rules, and transitioning records to the new owner. Post-close, the seller is out of the picture. Any future actions by the new owner — rent adjustments permitted by law, operational changes, lease decisions — are the new owner's responsibility.
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Do I have to give my tenants notice that I'm selling?
Not in most cases. Access for buyer inspections requires 24-hour notice per California Civil Code. A formal "sale notification" to tenants is not generally required.
Will my tenants' rent go up after the sale?
Only to the extent allowable under the applicable rent control regime or lease. The new owner inherits the same rent-increase schedule the prior owner would have had.
Can the new owner evict tenants after buying the building?
Only for cause (at-fault termination) or for specific no-fault reasons that carry relocation obligations and regulatory requirements. The sale itself is not a cause for termination.
Michael Sterman is Senior Managing Director Investments at Marcus & Millichap. This is informational, not legal advice — specific tenant notifications and disclosures depend on jurisdiction and transaction structure.
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