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Selling Tenant-Occupied Homes
This guidance describes statewide rules. Local jurisdictions may have different or additional rules. This is not legal advice. For legal advice, contact an attorney experienced in residential property transactions and landlord-tenant law.
If a tenancy has lasted longer than a year, can the tenancy be terminated for the sale of a home?
A tenancy may not be terminated for merely selling a home. The home has to be sold to a person who intends to move in as a primary resident. Here are all the ways a tenancy can be terminated after the first year of occupancy, which are called Qualifying Landlord Reasons (QLRs).
- Dwelling unit is being sold separately from any other dwelling unit and seller has accepted offer from buyer who intends to occupy the property as a primary residence.
- Landlord is remodeling the unit and the unit is or will be unfit or unsafe for occupancy
- Landlord or landlord’s immediate family member intends to move into the dwelling unit as a primary residence, and there is no comparable landlord-owned unit available on the property.
- Landlord intends to demolish the dwelling unit or convert it to non-residential use
In each of these instances the landlord must provide the tenant with:
- At least 90 days notice that includes the reason for the termination and supporting facts.
- If the landlord owns more than 4 dwelling units, an amount equal to one month’s rent.
- If terminating for sale of the home to an owner-occupant buyer, evidence of the offer
If the tenant is in a lease, the lease cannot be terminated by the landlord prematurely.
For more information on terminating tenancies after the first year, see ORS 90.427(5) and (6).
If a tenancy has lasted less than a year, can the tenancy be terminated for the sale of home?
Prior to July 1, 2021 a tenancy within the first year cannot be terminated for any reason other than tenant violations, due to HB 4401, the COVID-19 eviction moratorium. On July 1, 2021 or after, tenancies that are within their first year can be terminated with at least 30-days notice and without any stated cause. If the first year of the tenancy expired between April 1, 2020 and June 30, 2021 (during the COVID eviction moratorium) landlords may issue a 30-day no cause termination notice until August 31, 2021. If the tenant is in a lease, the lease cannot be terminated by the landlord prematurely.
For more information on terminating tenancies within the first year, see ORS 90.427 (3) and (4).
Do tenancy termination rules differ for properties that have more than one unit?
Yes. There are several differences. First, to invoke the qualifying landlord reason of selling a home to a person who intends to occupy it as a primary residence, the dwelling unit being sold must be sold separately from any other dwelling unit. A dwelling unit is a unit that someone lives in (un unoccupied unit would not be a dwelling unit). So, a landlord cannot invoke this reason when the property being sold includes more than one tenant-occupied unit. An accessory dwelling unit (ADU) is a dwelling unit. So if a main home and the ADU are occupied by separate tenants, selling the units together to a buyer who intends to move in as a primary residence is not a valid reason to terminate either tenancy.
Another difference is that the one month’s rent relocation assistance that is required when terminating a tenancy after the first year for a qualifying landlord reason is not required when the landlord owns four or fewer dwelling units.
There are also special rules when the landlord lives on the property, described below.
Do tenancy termination rules differ when the landlord lives on the property?
The rules are the same for these landlords during the first year of the tenancy, but after the first year landlords who live on the same property as the tenant have some additional rights, as long as there are no more than two dwelling units on the property.
When the COVID-19 eviction moratorium lifts on July 1, 2021 landlords in this situation with a month-to-month tenancy can terminate the tenancy for no cause with at least 60 days notice, if the tenancy has lasted longer than one year. This means that these landlords do not need a qualifying landlord reason, and do not need to provide 90-day notice.
Additionally, with a month-to-month tenancy if a landlord in this situation receives an offer to purchase their home from a buyer who intends to occupy the home as a primary residence, the landlord can issue a 30-day notice, along with evidence of the offer to purchase the home. No relocation assistance is required.
If the tenancy is a fixed-term tenancy, the landlord may not prematurely end the fixed-term, but when the COVID-19 eviction moratorium lifts on July 1, 2021 they can give a 30-day no cause notice to terminate the tenancy at the end of the lease period.
See ORS 90.427(8) for more information on terminations when the landlord lives on the same property.
Does a tenant have to let us in to show the home? What happens if they don’t?
Unless the rental agreement provides otherwise, the tenant must allow the landlord and the landlord’s agents reasonable access to the home with at least 24-hrs notice. However, if the tenant objects, the landlord or landlord’s agent cannot force their way into the home and cannot harass the tenant. If the tenant continues to refuse, only a judge can resolve the dispute. Tenants who unreasonably refuse access can be subject to penalties from the court including an injunction compelling access, termination of the rental agreement, and compensating the landlord for actual damages caused by the tenant’s refusal. Landlords who make an unlawful entry, a lawful entry in an unreasonable manner, or wo make repeated demands for entry that has the effect of unreasonably harassing the tenant can also suffer penalties including an injunction preventing the recurrence of the conduct, termination of the rental agreement and actual damages suffered by the tenant not less than one month’s rent.
In addition to the terms of the rental agreement and the 24-hr notice rules above, a landlord and tenant may come to a separate, signed written agreement allowing the landlord or the landlord’s agent to enter the home at any reasonable time without notice, if the agreement is created once the landlord is actively engaged in attempts to sell the home and the landlord provides the tenant with separate consideration that is cited in the agreement.
For more information on landlord access issues, see ORS 90.322.
Who is responsible for delivering the notice, seller of buyer?
Whoever is the landlord at the time (the one who owns the property or their property manager) should be the one to deliver the notice.
As a real estate licensee, should I be delivering the termination notice?
Unless you are already engaged in managing the property for the client, you should not be the one to deliver the notice. Instruct your client to work with an attorney on drafting and delivering the notice if the client does not have a property manager.
What happens if the tenant doesn’t move out? How can we protect buyers from that situation?
If the buyer closes on the home and the tenant still occupied the unit, the buyer will be the landlord, will be responsible for dealing with the tenant and will be subject to all of the landlord-tenant laws in Oregon statute and to the rental agreement. It is critical that buyers include in the contract to purchase the home specific and detailed language about the seller’s responsibilities for terminating the tenancy. Buyer’s may want to consider making the agreement to purchase contingent upon the successful removal of the tenant. Buyers may want to request copies of notices given by the landlord and have those reviewed by an attorney. Buyers may want to consider including language that the seller will indemnify the buyer against any damages suffered by the buyer due to seller’s failure to remove the tenant or issue proper notice. Real estate agents and buyers should not craft this language without the assistance of a qualified attorney.
Where can I find forms designed for landlords and property managers to terminate tenancies?
Have more questions about selling tenant-occupied homes? Let us know and we will keep adding to our FAQ.
For more information on landlord-tenant issues see the Oregon REALTORS® summary of SB 608 (rent control and limitation on no-cause evictions), HB 4401 (COVID-19 eviction moratorium), and SB 282 (extension of COVID-19 eviction moratorium grace period). For additional summaries written by landlord representatives visit Multifamily NW and the Oregon Rental Housing Association. For information written by tenant representatives visit www.oregonlawhelp.org.