Selling a House with Renters in Missouri: What Landlords Need to Know
Selling a property with existing tenants in Missouri requires careful navigation of state landlord-tenant laws that protect renters' rights while allowing property owners to sell their assets. Missouri law requires landlords to honor existing lease agreements during a property sale, though month-to-month tenancies can be terminated with proper notice.
Failure to follow proper procedures when selling tenant-occupied property in Missouri could result in legal complications, delayed closings, or potential lawsuits from tenants whose rights were violated. Always consult with a real estate attorney familiar with Missouri landlord-tenant law before proceeding with the sale.
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
Missouri Revised Statutes § 441.060 - Notice to terminate tenancy
When selling a property with tenants in Missouri, landlords must provide proper notice to terminate the tenancy. For month-to-month tenancies, one month's notice is required. For year-to-year leases, 60 days' notice before the end of the lease term is required. This law is relevant because sellers must understand the legal notice requirements before they can deliver vacant possession to buyers.
Missouri Revised Statutes § 535.300 - Security deposits
This law governs security deposit handling when selling a rental property. The seller must either transfer tenant security deposits to the new owner or return them to tenants. The new owner becomes liable for the security deposits if they're transferred. This is crucial for sellers to understand as part of the property transfer process.
Missouri Revised Statutes § 441.050 - Lease rights survive property transfer
In Missouri, when a property is sold, existing lease agreements remain valid and binding on the new owner. This means buyers must honor the terms of existing leases until they expire. Sellers must disclose all active leases to potential buyers, as these contractual obligations transfer with the property.
Missouri Revised Statutes § 441.233 - Disclosure of methamphetamine production
Missouri law requires disclosure if methamphetamine was produced on the property. When selling a rental property, landlords must disclose this information to both potential buyers and tenants. This disclosure requirement is part of the seller's legal obligations during the sale process.
Missouri Revised Statutes § 535.010 - Unlawful detainer
This statute defines unlawful detainer (illegal occupation of property) in Missouri. If tenants refuse to vacate after proper notice when a fixed-term lease ends, the new owner may need to file an unlawful detainer action. Sellers should understand this process may be necessary if tenants remain after closing and lease termination.
Regional Variances
Major Metropolitan Areas
Kansas City has specific ordinances that provide additional protections for tenants during property sales. Landlords must provide at least 60 days' notice to tenants before terminating a lease due to property sale, even if the lease is month-to-month. Additionally, if a tenant has lived in the property for more than two years, they may be entitled to relocation assistance if asked to vacate due to a sale.
St. Louis has enacted tenant protection ordinances that require sellers to disclose existing leases to potential buyers before closing. The city also requires that tenants be given first right of refusal to purchase the property before it's listed on the open market. Landlords must provide this offer in writing and give tenants 30 days to respond before proceeding with a public sale.
Suburban Counties
Unlike the City of St. Louis, St. Louis County follows standard Missouri state law regarding tenant rights during property sales. However, the county does require that all existing lease agreements be formally transferred to the new owner at closing, with written notification to tenants within 10 business days of the sale completion.
Jackson County (outside Kansas City limits) requires sellers to provide tenants with a minimum 45-day notice before showing the property to potential buyers. Additionally, the county has specific regulations about security deposit transfers, requiring that the original landlord either transfer the deposit to the new owner or return it to the tenant at closing.
Rural Areas
Greene County follows standard Missouri state law regarding property sales with tenants, with no additional local protections. However, the Springfield area has seen recent court cases establishing precedent that month-to-month tenancies require at least 30 days' notice before termination due to property sale, regardless of what the lease states.
Columbia has local ordinances that require landlords to disclose pending property sales to tenants. Additionally, if a property is sold with tenants in place, the new owner must honor the existing lease terms and cannot raise rent until the original lease term expires, even if the lease contains provisions allowing for mid-lease rent increases upon ownership change.
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. Missouri law requires that existing leases remain valid even when ownership changes. Pay special attention to any clauses regarding property sale, early termination options, or right of first refusal that may be included in the lease.
Prepare Notice to Tenants of Intent to Sell
3 days after startingWhile Missouri 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 that their lease rights will be respected, and explain how showings will be handled.
Determine Showing Protocol and Tenant Rights
5 days after startingUnder Missouri law (§ 441.060), landlords must provide reasonable notice (typically 24 hours) before entering the property. Establish a showing schedule that respects tenant privacy while allowing potential buyers to view the property. Consider offering incentives for cooperative tenants, such as reduced rent during the showing period or assistance with cleaning.
Complete Property Disclosure Statement
7 days after startingMissouri law requires sellers to disclose known material defects that could affect the property's value. Complete the disclosure form honestly, including any tenant-related issues such as late payments, property damage, or disputes. Failure to disclose known issues could result in legal liability after the sale.
Request Estoppel Certificate from Tenants
10 days after startingAn estoppel certificate confirms the terms of the lease, current rent, security deposit amount, and that the tenant has no claims against the landlord. While not required by Missouri law, this document protects both the seller and buyer by documenting the tenant's acknowledgment of the lease terms and preventing future disputes.
Prepare Rent Roll Document
12 days after startingCreate a comprehensive rent roll that includes tenant names, unit numbers, lease terms, monthly rent amounts, security deposit amounts, and payment history. This document is essential for the buyer to understand the rental income and tenant situation they will inherit with the property.
Consider Options for Vacant Property Sale
14 days after startingIf selling with vacant possession is preferred, evaluate legal options based on lease terms. For month-to-month tenancies, Missouri law requires at least one month's written notice to terminate. For fixed-term leases, you generally must wait until the lease expires unless there's an early termination clause or the tenant agrees to leave early.
Draft Early Lease Termination Agreement (If Applicable)
17 days after startingIf tenants agree to terminate their lease early, create a formal agreement documenting the terms. Include the move-out date, any financial incentives offered, return of security deposit terms, and release of liability for both parties. This agreement must be signed by all parties to be legally binding in Missouri.
Prepare Cash for Keys Agreement (If Applicable)
20 days after startingIf offering financial incentives for tenants to vacate early, document the terms in a Cash for Keys Agreement. Specify the amount offered, move-out date, property condition requirements, and that the tenant waives all rights to the property upon acceptance. This can be a legal alternative to eviction if tenants are cooperative.
Draft Real Estate Purchase Agreement with Tenant Provisions
25 days after startingWork with a real estate attorney to ensure the purchase agreement properly addresses the existence of tenants. Include provisions about the assignment of leases, transfer of security deposits, proration of rents, and responsibility for tenant issues that arise before and after closing. Missouri law requires security deposits to transfer to the new owner.
Prepare Assignment of Leases Document
28 days after startingCreate a formal assignment document that transfers all lease agreements to the new owner. This document should list all current leases, their terms, and affirm that the buyer assumes all landlord responsibilities under these leases. In Missouri, this assignment is legally necessary to transfer landlord rights and obligations.
Create Security Deposit Transfer Agreement
30 days after startingUnder Missouri law (§ 535.300), security deposits must transfer to the new owner. Prepare a document detailing all security deposits, their amounts, and the date they will transfer to the buyer. The law requires landlords to maintain security deposits in a separate account, so documentation of proper transfer is essential.
Notify Tenants of New Ownership
35 days after startingAfter closing, Missouri law requires that tenants be notified of the change in ownership and provided with the new owner's name and address for sending rent payments and maintenance requests. While this is technically the new owner's responsibility, coordinating this communication helps ensure a smooth transition.
Transfer Tenant Records and Information
37 days after startingProvide the new owner with all tenant records, including contact information, payment history, maintenance requests, and any relevant correspondence. While not specifically required by Missouri law, this is a professional best practice that helps the new owner effectively manage the property and maintain tenant relationships.
| 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. Missouri law requires that existing leases remain valid even when ownership changes. Pay special attention to any clauses regarding property sale, early termination options, or right of first refusal that may be included in the lease. | - | 1 |
| Prepare Notice to Tenants of Intent to Sell | While Missouri 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 that their lease rights will be respected, and explain how showings will be handled. | Notice to Tenants of Intent to Sell | 3 |
| Determine Showing Protocol and Tenant Rights | Under Missouri law (§ 441.060), landlords must provide reasonable notice (typically 24 hours) before entering the property. Establish a showing schedule that respects tenant privacy while allowing potential buyers to view the property. Consider offering incentives for cooperative tenants, such as reduced rent during the showing period or assistance with cleaning. | - | 5 |
| Complete Property Disclosure Statement | Missouri law requires sellers to disclose known material defects that could affect the property's value. Complete the disclosure form honestly, including any tenant-related issues such as late payments, property damage, or disputes. Failure to disclose known issues could result in legal liability after the sale. | Property Disclosure Statement | 7 |
| Request Estoppel Certificate from Tenants | An estoppel certificate confirms the terms of the lease, current rent, security deposit amount, and that the tenant has no claims against the landlord. While not required by Missouri law, this document protects both the seller and buyer by documenting the tenant's acknowledgment of the lease terms and preventing future disputes. | Estoppel Certificate | 10 |
| Prepare Rent Roll Document | Create a comprehensive rent roll that includes tenant names, unit numbers, lease terms, monthly rent amounts, security deposit amounts, and payment history. This document is essential for the buyer to understand the rental income and tenant situation they will inherit with the property. | Rent Roll | 12 |
| Consider Options for Vacant Property Sale | If selling with vacant possession is preferred, evaluate legal options based on lease terms. For month-to-month tenancies, Missouri law requires at least one month's written notice to terminate. For fixed-term leases, you generally must wait until the lease expires unless there's an early termination clause or the tenant agrees to leave early. | - | 14 |
| Draft Early Lease Termination Agreement (If Applicable) | If tenants agree to terminate their lease early, create a formal agreement documenting the terms. Include the move-out date, any financial incentives offered, return of security deposit terms, and release of liability for both parties. This agreement must be signed by all parties to be legally binding in Missouri. | Early Lease Termination Agreement | 17 |
| Prepare Cash for Keys Agreement (If Applicable) | If offering financial incentives for tenants to vacate early, document the terms in a Cash for Keys Agreement. Specify the amount offered, move-out date, property condition requirements, and that the tenant waives all rights to the property upon acceptance. This can be a legal alternative to eviction if tenants are cooperative. | Cash for Keys Agreement | 20 |
| Draft Real Estate Purchase Agreement with Tenant Provisions | Work with a real estate attorney to ensure the purchase agreement properly addresses the existence of tenants. Include provisions about the assignment of leases, transfer of security deposits, proration of rents, and responsibility for tenant issues that arise before and after closing. Missouri law requires security deposits to transfer to the new owner. | Real Estate Purchase Agreement | 25 |
| Prepare Assignment of Leases Document | Create a formal assignment document that transfers all lease agreements to the new owner. This document should list all current leases, their terms, and affirm that the buyer assumes all landlord responsibilities under these leases. In Missouri, this assignment is legally necessary to transfer landlord rights and obligations. | Assignment of Leases | 28 |
| Create Security Deposit Transfer Agreement | Under Missouri law (§ 535.300), security deposits must transfer to the new owner. Prepare a document detailing all security deposits, their amounts, and the date they will transfer to the buyer. The law requires landlords to maintain security deposits in a separate account, so documentation of proper transfer is essential. | Security Deposit Transfer Agreement | 30 |
| Notify Tenants of New Ownership | After closing, Missouri law requires that tenants be notified of the change in ownership and provided with the new owner's name and address for sending rent payments and maintenance requests. While this is technically the new owner's responsibility, coordinating this communication helps ensure a smooth transition. | - | 35 |
| Transfer Tenant Records and Information | Provide the new owner with all tenant records, including contact information, payment history, maintenance requests, and any relevant correspondence. While not specifically required by Missouri law, this is a professional best practice that helps the new owner effectively manage the property and maintain tenant relationships. | - | 37 |
Frequently Asked Questions
Yes, you can sell your house in Missouri even if you have tenants living in it. However, the sale does not automatically terminate the lease agreement. The new owner generally must honor the existing lease terms until the lease expires, unless the lease specifically states otherwise.
While Missouri law doesn't specifically require landlords to notify tenants of a sale, it's considered best practice to inform your tenants. Your lease may also contain provisions about notification requirements. Additionally, you'll need to coordinate with tenants for property showings, which typically requires reasonable notice (at least 24 hours) under Missouri landlord-tenant law.
In Missouri, when you sell a property with tenants, you must either transfer the security deposits to the new owner and notify tenants in writing of this transfer, or return the deposits to the tenants. If transferred, the new owner becomes responsible for the deposits. Missouri law requires security deposits to be held in a separate account, and proper documentation of the transfer should be included in your sale agreement.
No, you cannot evict tenants simply because you want to sell the property. In Missouri, you can only evict tenants for specific legal reasons such as non-payment of rent, lease violations, or if the lease term has ended. Selling the property is not a legal basis for eviction. If you have month-to-month tenants, you can terminate their tenancy with proper notice (typically 30 days in Missouri).
In Missouri, landlords have the right to show the property to prospective buyers, but must provide tenants with reasonable notice (generally at least 24 hours). The showings should be conducted at reasonable times. It's advisable to work out a showing schedule with your tenants to minimize disruption. Consider offering incentives like reduced rent during the showing period to encourage cooperation.
If your tenant has a fixed-term lease in Missouri, the new owner must honor that lease until it expires, unless the lease specifically states otherwise. The buyer would purchase the property subject to the existing lease. If the buyer wants to occupy the property, they have a few options: wait until the lease expires, negotiate with the tenant to terminate the lease early (possibly offering cash for keys), or purchase the property as an investment until the lease ends.
Yes, in Missouri you can include an early termination clause in your lease that specifically allows you to end the lease if you sell the property. However, this must be clearly stated in the original lease agreement. If your current lease doesn't have this provision, you cannot add it without the tenant's consent. Even with such a clause, you typically need to provide reasonable notice to the tenant (often 30-60 days).
You should disclose the existence of tenants and provide details about their lease terms, including monthly rent, security deposit amounts, lease duration, and any special provisions. However, be careful about sharing personal information about tenants to protect their privacy. It's advisable to have copies of all lease agreements available for serious buyers to review. In Missouri, you must also disclose if there are any ongoing eviction proceedings or lease disputes.
For month-to-month tenants in Missouri, either the current landlord (before the sale) or the new owner (after the sale) can terminate the tenancy by providing proper written notice, which is typically 30 days in Missouri. The sale itself doesn't automatically terminate the tenancy, but it does give the new owner flexibility to end the arrangement with proper notice if they choose to.
When selling a rental property in Missouri, you'll likely face federal capital gains taxes on any profit, and you may need to recapture depreciation taken during ownership (taxed at 25%). Missouri also imposes state income tax on these gains. However, you might qualify for a 1031 exchange to defer taxes if you're purchasing another investment property. Additionally, if you lived in the property for at least 2 of the last 5 years, you might qualify for a capital gains exclusion. Consult with a tax professional for advice specific to your situation.