Selling a House with Renters in Maine: What Landlords Need to Know
Selling a property with existing tenants in Maine requires careful navigation of state-specific landlord-tenant laws that protect renters' rights. Maine law generally requires landlords to honor existing lease agreements when selling property, though several options exist for legally transitioning tenants depending on their lease status.
Failure to follow proper procedures when selling tenant-occupied property in Maine could result in legal complications, delayed sales, or potential lawsuits from tenants whose rights were violated. Always provide proper written notice and consider consulting with a real estate attorney familiar with Maine's landlord-tenant laws.
Key Considerations
Scenarios
Decisions
Scenarios
Decisions
Scenarios
Decisions
Relevant Documents
Assignment of Leases
A legal document that transfers the landlord's rights and obligations under existing lease agreements to the new property owner, ensuring continuity of the tenancy terms.
Cash for Keys Agreement
A document that formalizes an arrangement where the property owner offers financial incentive to tenants to vacate the property voluntarily before the sale or closing date.
Early Lease Termination Agreement
If the seller and tenants mutually agree to end the lease early before the sale, this document outlines the terms of that agreement, including any compensation or notice periods.
Estoppel Certificate
A document signed by tenants confirming the terms of their lease, current rent amount, security deposit held, and that the landlord is not in default. This provides assurance to potential buyers about the status of existing tenancies.
Notice to Tenants of Intent to Sell
A formal written notice informing tenants of the property owner's intention to sell the property. This document helps establish clear communication and may be required by law in many jurisdictions.
Property Disclosure Statement
A document where the seller discloses known material defects and other important information about the property, including the presence of tenants and the terms of their occupancy.
Real Estate Purchase Agreement
The contract between seller and buyer that should specifically address the existence of tenants, the status of their leases, and how those leases will be handled during and after the sale.
Rent Roll
A document that lists all rental units, current tenants, lease terms, monthly rent amounts, security deposits, and payment histories. This provides potential buyers with a clear picture of the property's rental income.
Security Deposit Transfer Agreement
A document that formalizes the transfer of tenant security deposits from the seller to the buyer, including accounting for all deposits and accrued interest where applicable.
Relevant Laws
Maine Landlord-Tenant Law (Title 14, Chapter 710: Rental Property)
When selling a property with tenants in Maine, landlords must respect existing lease agreements. If tenants have a fixed-term lease, the new owner generally must honor the terms until the lease expires. For month-to-month tenancies, proper notice must be given according to state law, which is typically 30 days in Maine.
Maine Notice Requirements (Title 14, §6002)
Maine law requires landlords to provide tenants with proper written notice before terminating a tenancy. For tenants who have lived in the unit less than two years, 30 days' notice is required. For tenants who have lived in the unit two years or more, 45 days' notice is required. This applies when selling a property with month-to-month tenants.
Right of First Refusal (Not Mandated in Maine)
Unlike some states, Maine does not have a state law requiring landlords to offer tenants the right of first refusal when selling a rental property. However, individual lease agreements may contain such provisions that would need to be honored during a sale.
Security Deposit Transfer (Title 14, §6035)
When selling a property with tenants in Maine, the seller must either transfer all security deposits and accrued interest to the buyer or return the deposits to the tenants. The seller must also provide written notice to tenants about the transfer of their security deposits to the new owner.
Disclosure Requirements (Title 33, Chapter 7)
Maine law requires sellers to disclose certain information about the property's condition to potential buyers. When tenants occupy the property, sellers should disclose the existence of leases and any potential issues related to the tenancy that could affect the property value or buyer's use of the property.
Showing Occupied Property (Title 14, §6025)
Maine law requires landlords to give tenants reasonable notice (at least 24 hours) before entering the property, including for showings to potential buyers. Landlords cannot abuse this right of access or use it to harass tenants, even during the sales process.
Regional Variances
Maine County Variations
Portland has additional tenant protections beyond state law. Landlords must provide 90 days' notice (instead of the state-required 30 days) when terminating a tenancy at will to sell a property. The city also has a Rent Control and Tenant Protection Ordinance that may affect the sale process if the property falls under rent control provisions.
South Portland has a Rent Stabilization Ordinance that limits rent increases and provides additional tenant protections. When selling a rental property, landlords must comply with these local regulations, which may include longer notice periods and restrictions on evictions related to property sales.
Bangor follows Maine state law regarding tenant rights during property sales. However, the city has a more active code enforcement division that may require additional property inspections and compliance certifications before a rental property can be transferred to a new owner.
Brunswick has local ordinances that may require additional disclosures to tenants when a rental property is being sold. The town also has specific requirements for maintaining rental registrations during property transfers.
Maine Coastal vs. Inland Regions
Coastal communities often have seasonal rental markets that affect the timing and process of selling tenant-occupied properties. Local ordinances in tourist-heavy areas may have additional regulations for short-term rentals that could impact the sale process. Properties in these areas often have higher valuations, which may influence tenant relocation assistance expectations.
Inland communities generally follow state law without significant additional regulations. However, college towns like Orono (home to University of Maine) may have specific ordinances related to student housing that could affect the sale of rental properties, particularly regarding lease timing aligned with academic calendars.
Suggested Compliance Checklist
Review Lease Agreement
1 days after startingCarefully review all current lease agreements to understand tenant rights, lease terms, and any provisions related to property sale. Pay special attention to lease duration, renewal options, and any clauses that might affect your ability to sell the property. Maine law requires honoring existing leases even after a sale, so understanding these agreements is crucial.
Prepare Notice to Tenants of Intent to Sell
3 days after startingWhile Maine law doesn't specifically require notifying tenants of your intent to sell, providing written notice is a professional courtesy and helps maintain good relations. This notice should inform tenants of your plans to sell, reassure them about their rights under existing leases, and explain how showings will be conducted. Maine law requires reasonable notice (at least 24 hours) before entering the property for showings.
Complete Property Disclosure Statement
5 days after startingMaine law (33 M.R.S.A. §173) requires sellers to provide a property disclosure statement to potential buyers. This document must disclose known material defects and other specified information about the property. When selling tenant-occupied property, include information about existing tenancies, any ongoing maintenance issues reported by tenants, and the condition of tenant-occupied spaces.
Request Estoppel Certificate from Tenants
7 days after startingAn estoppel certificate confirms the terms of the lease, current rent, security deposit amounts, and that the tenant has no claims against the landlord. While not required by Maine law, this document protects both the seller and buyer by documenting the current status of all tenancies. Request this from each tenant, allowing them reasonable time to complete it.
Prepare Rent Roll
8 days after startingCreate a comprehensive rent roll documenting all current tenancies, including tenant names, unit numbers, monthly rent amounts, security deposits held, lease start and end dates, and any outstanding issues. This document will be essential for potential buyers to understand the rental income and tenant situation.
Determine Strategy for Tenants and Showings
10 days after startingDecide whether to sell with tenants in place or vacant property. If seeking vacant property, review Maine law regarding lease termination. For month-to-month tenancies, Maine requires 30 days' written notice. For fixed-term leases, early termination is only allowed if specified in the lease or by mutual agreement. For showings, Maine law requires reasonable notice (minimum 24 hours) before entering occupied units.
Consider Early Lease Termination Agreement (if applicable)
15 days after startingIf you prefer to sell the property vacant and tenants have fixed-term leases, you may need to negotiate early termination. This agreement should outline the terms of early termination, including any compensation offered to tenants. Maine law doesn't require landlords to offer compensation, but financial incentives can facilitate voluntary termination. Be aware that tenants are not obligated to accept early termination unless specified in their lease.
Consider Cash for Keys Agreement (if applicable)
17 days after startingA Cash for Keys agreement offers financial incentive to tenants to vacate the property before their lease ends. This document should clearly state the amount offered, the date by which the tenant must vacate, and the condition the property must be left in. While not required by Maine law, this can be an effective way to legally and amicably end tenancies before selling. The agreement must be voluntary and cannot be used to circumvent tenant protections.
Prepare Real Estate Purchase Agreement
20 days after startingWork with a real estate attorney to prepare a purchase agreement that addresses the presence of tenants. The agreement should specify whether the property is being sold with tenants in place, how security deposits will be handled, and include contingencies related to tenant occupancy. Maine law requires security deposits to be transferred to the new owner at closing.
Prepare Assignment of Leases
22 days after startingIf selling with tenants in place, prepare an assignment of leases to transfer all landlord rights and obligations to the new owner. This document should list all current leases being transferred and affirm that these leases are in full force and effect. Under Maine law, the new owner becomes bound by the terms of existing leases after purchase.
Prepare Security Deposit Transfer Agreement
23 days after startingMaine law (14 M.R.S.A. §6035) requires landlords to transfer all security deposits to the new owner when property is sold. This agreement should document the transfer of all security deposits, including amounts, tenant names, and accrued interest. The law requires written notice to tenants about the transfer, including the new owner's name and address.
Notify Tenants of New Ownership
30 days after startingAfter closing, Maine law requires notifying tenants in writing about the change in ownership, providing the new owner's name and address for service of process and where rent should be paid. This is typically the responsibility of the seller, but can be negotiated in the purchase agreement. Ensure this notification complies with Maine's requirements.
| Task | Description | Document | Days after starting |
|---|---|---|---|
| Review Lease Agreement | Carefully review all current lease agreements to understand tenant rights, lease terms, and any provisions related to property sale. Pay special attention to lease duration, renewal options, and any clauses that might affect your ability to sell the property. Maine law requires honoring existing leases even after a sale, so understanding these agreements is crucial. | - | 1 |
| Prepare Notice to Tenants of Intent to Sell | While Maine law doesn't specifically require notifying tenants of your intent to sell, providing written notice is a professional courtesy and helps maintain good relations. This notice should inform tenants of your plans to sell, reassure them about their rights under existing leases, and explain how showings will be conducted. Maine law requires reasonable notice (at least 24 hours) before entering the property for showings. | Notice to Tenants of Intent to Sell | 3 |
| Complete Property Disclosure Statement | Maine law (33 M.R.S.A. §173) requires sellers to provide a property disclosure statement to potential buyers. This document must disclose known material defects and other specified information about the property. When selling tenant-occupied property, include information about existing tenancies, any ongoing maintenance issues reported by tenants, and the condition of tenant-occupied spaces. | Property Disclosure Statement | 5 |
| Request Estoppel Certificate from Tenants | An estoppel certificate confirms the terms of the lease, current rent, security deposit amounts, and that the tenant has no claims against the landlord. While not required by Maine law, this document protects both the seller and buyer by documenting the current status of all tenancies. Request this from each tenant, allowing them reasonable time to complete it. | Estoppel Certificate | 7 |
| Prepare Rent Roll | Create a comprehensive rent roll documenting all current tenancies, including tenant names, unit numbers, monthly rent amounts, security deposits held, lease start and end dates, and any outstanding issues. This document will be essential for potential buyers to understand the rental income and tenant situation. | Rent Roll | 8 |
| Determine Strategy for Tenants and Showings | Decide whether to sell with tenants in place or vacant property. If seeking vacant property, review Maine law regarding lease termination. For month-to-month tenancies, Maine requires 30 days' written notice. For fixed-term leases, early termination is only allowed if specified in the lease or by mutual agreement. For showings, Maine law requires reasonable notice (minimum 24 hours) before entering occupied units. | - | 10 |
| Consider Early Lease Termination Agreement (if applicable) | If you prefer to sell the property vacant and tenants have fixed-term leases, you may need to negotiate early termination. This agreement should outline the terms of early termination, including any compensation offered to tenants. Maine law doesn't require landlords to offer compensation, but financial incentives can facilitate voluntary termination. Be aware that tenants are not obligated to accept early termination unless specified in their lease. | Early Lease Termination Agreement | 15 |
| Consider Cash for Keys Agreement (if applicable) | A Cash for Keys agreement offers financial incentive to tenants to vacate the property before their lease ends. This document should clearly state the amount offered, the date by which the tenant must vacate, and the condition the property must be left in. While not required by Maine law, this can be an effective way to legally and amicably end tenancies before selling. The agreement must be voluntary and cannot be used to circumvent tenant protections. | Cash for Keys Agreement | 17 |
| Prepare Real Estate Purchase Agreement | Work with a real estate attorney to prepare a purchase agreement that addresses the presence of tenants. The agreement should specify whether the property is being sold with tenants in place, how security deposits will be handled, and include contingencies related to tenant occupancy. Maine law requires security deposits to be transferred to the new owner at closing. | Real Estate Purchase Agreement | 20 |
| Prepare Assignment of Leases | If selling with tenants in place, prepare an assignment of leases to transfer all landlord rights and obligations to the new owner. This document should list all current leases being transferred and affirm that these leases are in full force and effect. Under Maine law, the new owner becomes bound by the terms of existing leases after purchase. | Assignment of Leases | 22 |
| Prepare Security Deposit Transfer Agreement | Maine law (14 M.R.S.A. §6035) requires landlords to transfer all security deposits to the new owner when property is sold. This agreement should document the transfer of all security deposits, including amounts, tenant names, and accrued interest. The law requires written notice to tenants about the transfer, including the new owner's name and address. | Security Deposit Transfer Agreement | 23 |
| Notify Tenants of New Ownership | After closing, Maine law requires notifying tenants in writing about the change in ownership, providing the new owner's name and address for service of process and where rent should be paid. This is typically the responsibility of the seller, but can be negotiated in the purchase agreement. Ensure this notification complies with Maine's requirements. | - | 30 |
Frequently Asked Questions
Yes, you can sell your house in Maine even if you have tenants living in it. However, the sale does not automatically terminate existing lease agreements. The new owner generally must honor the terms of any existing lease until it expires, and tenants maintain their rights under Maine law throughout the ownership transition.
While Maine law doesn't specifically require landlords to notify tenants of a sale, it's considered best practice to provide written notice. This helps maintain good relations and reduces confusion. However, if you plan to show the property to potential buyers, Maine law does require you to give tenants 'reasonable notice' before entering the property, which is generally interpreted as at least 24 hours advance notice.
In Maine, you cannot evict tenants simply because you want to sell the property. For tenants with a fixed-term lease, you must wait until the lease expires. For month-to-month tenants, you must provide proper notice to terminate the tenancy (30 days written notice in most cases). Any eviction must follow a legal reason or 'just cause' as defined by Maine law, and the proper eviction procedures must be followed.
When selling a property with tenants in Maine, you have two options for handling security deposits: 1) Transfer the deposits to the new owner and notify tenants in writing of the transfer amount and the new owner's name and address, or 2) Return the deposits to the tenants. Maine law requires security deposits to be transferred to the new owner, who then assumes responsibility for them. The transfer should be documented in your sale agreement.
If your tenants have a fixed-term lease, the new owner cannot raise the rent until that lease expires, as they must honor the existing terms. For month-to-month tenancies, the new owner can increase rent by providing proper written notice (typically 45 days in Maine). Some municipalities in Maine may have additional rent control ordinances that further restrict rent increases, so the new owner should check local regulations.
In Maine, landlords must provide 'reasonable notice' (generally at least 24 hours) before entering a rental property for showings. Tenants cannot unreasonably deny access for showings, but their rights to quiet enjoyment of the property must be respected. It's advisable to work out a showing schedule with tenants in advance, possibly offering incentives like reduced rent during the selling period or assistance with cleaning before showings.
If tenants are not cooperating with reasonable requests for showings despite proper notice, you may have grounds for legal action, but eviction solely for this reason is difficult in Maine. Try to address concerns through communication first, perhaps offering incentives for cooperation. Document all interactions and ensure you're following Maine's laws regarding entry notice. If problems persist, consult with a Maine real estate attorney about your specific situation.
Yes, you can offer tenants a 'cash for keys' agreement to vacate before their lease ends. This voluntary agreement typically includes financial compensation in exchange for the tenant moving out by a specific date and leaving the property in good condition. Any such agreement should be in writing, signed by both parties, and clearly state the terms. This approach can be more cost-effective than waiting for a lease to expire or going through eviction proceedings.
Yes, you must disclose to potential buyers that the property has tenants and provide details about existing lease agreements. Maine's property disclosure laws require sellers to disclose material facts that could affect the property's value. Existing tenancies are considered material information. Providing copies of all lease agreements to potential buyers is recommended to ensure transparency about the obligations they would be assuming.
When selling a property with Section 8 tenants in Maine, the new owner must honor the existing lease agreement and continue accepting the Section 8 voucher until the lease term ends. The new owner will need to complete paperwork with the local housing authority to receive the housing assistance payments. They'll also need to comply with Section 8 program requirements, including property inspections and fair market rent limitations.