Selling a House with Renters in Massachusetts: What Landlords Need to Know
Selling a tenant-occupied property in Massachusetts requires careful navigation of the state's tenant-friendly laws. Landlords must honor existing lease agreements and provide proper notice according to Massachusetts law, while tenants maintain specific rights throughout the sales process.
Massachusetts has strong tenant protection laws that significantly impact the property sale process. Failing to follow proper procedures when selling a tenant-occupied property can result in legal complications, delayed closings, and potential liability for both sellers and buyers.
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
Massachusetts General Laws Chapter 186, Section 12 - Termination of Tenancy at Will
This law requires landlords to provide proper notice to terminate a tenancy-at-will (month-to-month tenancy). In Massachusetts, landlords must provide at least 30 days' written notice (or a full rental period, whichever is longer) to terminate a tenancy-at-will. When selling a property with tenants, this notice requirement must be followed unless the new owner is willing to maintain the existing tenancy.
Massachusetts General Laws Chapter 186, Section 13 - Termination of Lease
For tenants with a fixed-term lease, landlords cannot terminate the tenancy before the lease expires unless the tenant violates lease terms. When selling a property, the new owner is generally bound by existing lease agreements and must honor them until they expire. This means that selling a house with tenants who have a valid lease may require transferring the lease to the new owner.
Massachusetts General Laws Chapter 186, Section 15B - Security Deposits
This law governs how security deposits must be handled when property ownership changes. When selling a property with tenants, the seller must transfer all security deposits to the new owner, along with accrued interest. The new owner becomes responsible for maintaining these deposits in accordance with state law and must notify tenants of the transfer in writing.
Massachusetts Lead Paint Law (M.G.L. c. 111, §§ 189A-199B)
Massachusetts law requires disclosure of lead paint hazards when selling or renting properties built before 1978. When selling a property with tenants, sellers must ensure compliance with lead paint disclosure requirements, which may include providing tenants and buyers with lead paint inspection reports and disclosure forms.
Massachusetts Consumer Protection Act (M.G.L. c. 93A)
This law prohibits unfair or deceptive practices in business transactions, including real estate. When selling a property with tenants, landlords must act in good faith and avoid deceptive practices such as misrepresenting tenant rights or attempting to force tenants out through harassment or illegal means.
Massachusetts General Laws Chapter 186, Section 18 - Retaliation
This law prohibits landlords from retaliating against tenants for exercising their legal rights. When selling a property, landlords cannot terminate tenancies or increase rent in retaliation for tenants asserting their rights. This protection extends for six months after a tenant has engaged in protected activities such as reporting code violations.
Massachusetts General Laws Chapter 239 - Summary Process for Possession (Eviction Law)
This chapter outlines the legal process for eviction in Massachusetts. When selling a property with tenants who refuse to vacate, the new owner must follow proper eviction procedures through the court system rather than attempting 'self-help' evictions, which are illegal in Massachusetts.
Regional Variances
Greater Boston Area
Boston has some of the strongest tenant protections in Massachusetts. The Boston Housing Authority requires landlords to provide tenants with a 'Notice of Tenant's Rights' when selling a property. Additionally, Boston's Condo Conversion Ordinance provides tenants with a minimum one-year notice period before they can be asked to vacate for condo conversion, and vulnerable tenants (elderly, disabled, or low-income) are entitled to up to five years' notice.
Cambridge has particularly strong tenant protections. The Cambridge Condo Conversion Ordinance requires landlords to provide tenants with a minimum of one year's notice before eviction due to condo conversion. Elderly, disabled, and low-income tenants receive additional protections, including potential relocation assistance of up to $10,000 and a right of first refusal to purchase the unit.
Somerville has a Condominium Conversion Ordinance that requires landlords to provide tenants with a minimum of one year's notice before eviction due to property sale or condo conversion. The city also requires landlords to pay relocation expenses of up to $10,000 for displaced tenants, and vulnerable tenants (elderly, disabled, or low-income) receive extended protections.
Western Massachusetts
Springfield follows standard Massachusetts state law regarding tenant rights during property sales, with no additional municipal protections. Landlords must honor existing lease terms but can choose not to renew month-to-month tenancies with proper 30-day notice after the property is sold.
Amherst, being a college town with a large rental population, has implemented additional tenant protections. Landlords must provide 60 days' notice (rather than the state minimum of 30 days) when terminating tenancy due to property sale for tenants with month-to-month agreements.
Cape Cod and Islands
In Cape Cod communities, seasonal rental considerations affect property sales. Many properties have different rules for in-season versus off-season rentals. Sellers must disclose existing seasonal rental agreements to buyers, and these agreements typically remain binding even after sale.
Nantucket has unique housing challenges due to its island location and seasonal economy. The Nantucket Housing Authority provides additional oversight for rental property sales, and tenants in year-round rentals receive enhanced notification requirements (60 days minimum) when properties are sold.
North Shore
Salem follows standard Massachusetts state law regarding tenant rights during property sales, but has implemented a Tenant Notification Ordinance requiring landlords to provide written notice to tenants within 7 days of listing a property for sale.
Gloucester, with its significant fishing industry and seasonal economy, has special considerations for workforce housing. The city requires 60-day minimum notice periods for tenants in properties being sold, rather than the state-standard 30 days for month-to-month tenancies.
Suggested Compliance Checklist
Review Existing Lease Agreements
1 days after startingCarefully review all current lease agreements to understand tenant rights, lease terms, and expiration dates. Massachusetts law heavily protects tenants, and lease terms will determine many of your options. Pay special attention to any clauses regarding property sale, right of first refusal, or early termination provisions.
Determine Tenancy Type
2 days after startingIdentify whether your tenants have a fixed-term lease or are month-to-month tenants. This distinction is crucial as it affects notice requirements and your ability to terminate tenancies. Fixed-term leases generally cannot be terminated early due to a sale in Massachusetts unless the lease specifically allows for it.
Draft Notice to Tenants of Intent to Sell
3 days after startingWhile not legally required in Massachusetts, providing written notice to tenants about your intent to sell is a best practice. This document should inform tenants of the upcoming sale, explain how showings will be handled, and reassure them about their rights. Massachusetts law requires reasonable notice (at least 24 hours) before entering the property for showings.
Prepare Property Disclosure Statement
5 days after startingMassachusetts law requires sellers to disclose known material defects to potential buyers. When tenants occupy the property, you must include information about existing tenancies, any tenant-related issues, and the condition of tenant-occupied areas. Be thorough and honest to avoid future liability.
Request Estoppel Certificate from Tenants
7 days after startingAn estoppel certificate confirms the terms of the lease, current rent, security deposit amounts, and that no landlord defaults exist. In Massachusetts, while not legally required, this document protects both seller and buyer by preventing tenants from later claiming different lease terms. Request this from each tenant.
Prepare Rent Roll
8 days after startingCreate a comprehensive rent roll documenting all current tenancies, including monthly rent amounts, security deposits held, lease start and end dates, and any outstanding issues. This document is essential for potential buyers to understand the rental income and obligations they would be assuming.
Evaluate Options for Vacant Possession
10 days after startingIf you prefer to sell the property vacant, assess your legal options. In Massachusetts, you cannot simply terminate a fixed-term lease due to a sale. For month-to-month tenancies, you must provide at least 30 days' written notice (a full rental period). Consider offering financial incentives for voluntary termination.
Draft Early Lease Termination Agreement (if applicable)
12 days after startingIf tenants agree to terminate their lease early, document this agreement carefully. The agreement should specify the move-out date, any financial compensation, handling of security deposits, and release of future obligations. In Massachusetts, this must be a mutual agreement as landlords cannot unilaterally terminate fixed-term leases due to a sale.
Draft Cash for Keys Agreement (if applicable)
14 days after startingIf offering financial incentives for tenants to vacate, document the terms in a formal agreement. Specify the amount offered, timeline for vacating, property condition requirements, and payment terms. In Massachusetts, this can be an effective legal strategy when you cannot otherwise terminate a lease, but all terms must be clearly documented and signed by both parties.
Comply with Security Deposit Laws
16 days after startingMassachusetts has strict security deposit laws. Deposits must be held in a separate, interest-bearing account in a Massachusetts bank, with account details disclosed to tenants. When selling, you must either transfer these accounts to the new owner or return deposits to tenants. Failure to comply can result in triple damages.
Prepare Security Deposit Transfer Agreement
18 days after startingIf the buyer will take over the tenancies, create an agreement transferring all security deposits and last month's rent payments. Massachusetts law requires detailed accounting of these funds, including interest accrued. The agreement should document the transfer of both funds and legal obligations to the new owner.
Draft Assignment of Leases
20 days after startingPrepare a formal assignment transferring all lease rights and obligations to the new owner. This document should list all current leases, affirm they are in good standing, and transfer all landlord rights and responsibilities. In Massachusetts, tenants must be notified in writing of any change in ownership and where to send rent payments.
Prepare Real Estate Purchase Agreement with Tenant Provisions
22 days after startingEnsure your purchase agreement specifically addresses existing tenancies. Include provisions about lease assignments, security deposit transfers, and representations about tenant relationships. In Massachusetts, the agreement should acknowledge that tenancies survive the sale and that the buyer is purchasing subject to existing leases unless otherwise arranged.
Notify Tenants of Property Transfer
30 days after startingOnce the sale is complete, Massachusetts law requires that tenants be notified in writing about the new ownership. This notice should include the new owner's name, address, and instructions for rent payment. This is typically the responsibility of the seller but should be coordinated with the buyer.
Transfer Utilities and Services
32 days after startingCoordinate with the buyer regarding the transfer of any utilities or services included in tenant leases. In Massachusetts, if utilities are included in rent, there must be no interruption in service during the ownership transition. Document all transfers and notifications to service providers.
| Task | Description | Document | Days after starting |
|---|---|---|---|
| Review Existing Lease Agreements | Carefully review all current lease agreements to understand tenant rights, lease terms, and expiration dates. Massachusetts law heavily protects tenants, and lease terms will determine many of your options. Pay special attention to any clauses regarding property sale, right of first refusal, or early termination provisions. | - | 1 |
| Determine Tenancy Type | Identify whether your tenants have a fixed-term lease or are month-to-month tenants. This distinction is crucial as it affects notice requirements and your ability to terminate tenancies. Fixed-term leases generally cannot be terminated early due to a sale in Massachusetts unless the lease specifically allows for it. | - | 2 |
| Draft Notice to Tenants of Intent to Sell | While not legally required in Massachusetts, providing written notice to tenants about your intent to sell is a best practice. This document should inform tenants of the upcoming sale, explain how showings will be handled, and reassure them about their rights. Massachusetts law requires reasonable notice (at least 24 hours) before entering the property for showings. | Notice to Tenants of Intent to Sell | 3 |
| Prepare Property Disclosure Statement | Massachusetts law requires sellers to disclose known material defects to potential buyers. When tenants occupy the property, you must include information about existing tenancies, any tenant-related issues, and the condition of tenant-occupied areas. Be thorough and honest to avoid future liability. | 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 no landlord defaults exist. In Massachusetts, while not legally required, this document protects both seller and buyer by preventing tenants from later claiming different lease terms. Request this from each tenant. | Estoppel Certificate | 7 |
| Prepare Rent Roll | Create a comprehensive rent roll documenting all current tenancies, including monthly rent amounts, security deposits held, lease start and end dates, and any outstanding issues. This document is essential for potential buyers to understand the rental income and obligations they would be assuming. | Rent Roll | 8 |
| Evaluate Options for Vacant Possession | If you prefer to sell the property vacant, assess your legal options. In Massachusetts, you cannot simply terminate a fixed-term lease due to a sale. For month-to-month tenancies, you must provide at least 30 days' written notice (a full rental period). Consider offering financial incentives for voluntary termination. | - | 10 |
| Draft Early Lease Termination Agreement (if applicable) | If tenants agree to terminate their lease early, document this agreement carefully. The agreement should specify the move-out date, any financial compensation, handling of security deposits, and release of future obligations. In Massachusetts, this must be a mutual agreement as landlords cannot unilaterally terminate fixed-term leases due to a sale. | Early Lease Termination Agreement | 12 |
| Draft Cash for Keys Agreement (if applicable) | If offering financial incentives for tenants to vacate, document the terms in a formal agreement. Specify the amount offered, timeline for vacating, property condition requirements, and payment terms. In Massachusetts, this can be an effective legal strategy when you cannot otherwise terminate a lease, but all terms must be clearly documented and signed by both parties. | Cash for Keys Agreement | 14 |
| Comply with Security Deposit Laws | Massachusetts has strict security deposit laws. Deposits must be held in a separate, interest-bearing account in a Massachusetts bank, with account details disclosed to tenants. When selling, you must either transfer these accounts to the new owner or return deposits to tenants. Failure to comply can result in triple damages. | - | 16 |
| Prepare Security Deposit Transfer Agreement | If the buyer will take over the tenancies, create an agreement transferring all security deposits and last month's rent payments. Massachusetts law requires detailed accounting of these funds, including interest accrued. The agreement should document the transfer of both funds and legal obligations to the new owner. | Security Deposit Transfer Agreement | 18 |
| Draft Assignment of Leases | Prepare a formal assignment transferring all lease rights and obligations to the new owner. This document should list all current leases, affirm they are in good standing, and transfer all landlord rights and responsibilities. In Massachusetts, tenants must be notified in writing of any change in ownership and where to send rent payments. | Assignment of Leases | 20 |
| Prepare Real Estate Purchase Agreement with Tenant Provisions | Ensure your purchase agreement specifically addresses existing tenancies. Include provisions about lease assignments, security deposit transfers, and representations about tenant relationships. In Massachusetts, the agreement should acknowledge that tenancies survive the sale and that the buyer is purchasing subject to existing leases unless otherwise arranged. | Real Estate Purchase Agreement | 22 |
| Notify Tenants of Property Transfer | Once the sale is complete, Massachusetts law requires that tenants be notified in writing about the new ownership. This notice should include the new owner's name, address, and instructions for rent payment. This is typically the responsibility of the seller but should be coordinated with the buyer. | - | 30 |
| Transfer Utilities and Services | Coordinate with the buyer regarding the transfer of any utilities or services included in tenant leases. In Massachusetts, if utilities are included in rent, there must be no interruption in service during the ownership transition. Document all transfers and notifications to service providers. | - | 32 |
Frequently Asked Questions
Yes, you can sell your house in Massachusetts even if you have tenants living in it. The property can be transferred to a new owner with the existing lease agreements in place. The new owner will become the landlord and must honor the terms of any existing leases.
While Massachusetts law doesn't specifically require you to inform tenants that you're selling the property, it's considered best practice to do so. Providing written notice helps maintain good relations and prepares tenants for property showings and potential changes in ownership.
In Massachusetts, you cannot evict tenants simply because you want to sell the property. You can only evict tenants for specific legal reasons such as non-payment of rent, lease violations, or at the end of a lease term. For tenants with a fixed-term lease, you must wait until the lease expires. For tenants-at-will (month-to-month), you must provide proper notice (typically 30 days or a full rental period, whichever is longer).
In Massachusetts, landlords have the right to show the property to prospective buyers, but must provide reasonable notice to tenants (typically 24 hours). You cannot excessively disturb tenants with showings, and showings should occur at reasonable hours. It's best to work out a showing schedule that accommodates your tenants' needs while allowing you to market your property effectively.
When selling a property with tenants in Massachusetts, you must either transfer the security deposits to the new owner or return them to the tenants. If you transfer the deposits, you must notify tenants in writing about the transfer, including the new owner's name and contact information. Massachusetts law requires security deposits to be held in a separate interest-bearing account, and proper documentation of this transfer must be maintained.
The new owner must honor the terms of any existing lease until it expires. They cannot raise the rent during a fixed-term lease period. For tenants-at-will (month-to-month), the new owner can increase rent with proper notice (typically 30 days or one rental period, whichever is longer). However, some Massachusetts municipalities have rent control or stabilization ordinances that may further restrict rent increases.
If your tenant has a Section 8 or other housing voucher, the new owner must continue to accept the voucher for the duration of the lease. The Housing Assistance Payment (HAP) contract will need to be transferred to the new owner. The new owner will need to be approved by the housing authority and agree to comply with Section 8 program requirements.
Yes, you should disclose to potential buyers that the property is tenant-occupied. You should provide details about the lease terms, rental amounts, security deposits, and any other relevant information. Failure to disclose this information could potentially lead to legal issues after the sale.
Yes, you can offer your tenants a 'cash for keys' agreement to incentivize them to move out early. This is legal in Massachusetts as long as it's truly voluntary and not coercive. The agreement should be in writing and specify the amount, move-out date, and condition requirements. This approach can be beneficial if you want to sell the property vacant, but tenants are under no obligation to accept such offers.
Selling a property with code violations or habitability issues in Massachusetts can lead to legal complications. Massachusetts has strict laws regarding the warranty of habitability. You may be liable for these issues even after the sale if you didn't disclose them. Additionally, tenants have the right to withhold rent or take legal action for serious habitability issues. It's advisable to address any code violations or maintenance issues before selling the property.