Selling a House with Renters in Ohio: What Landlords Need to Know

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, early termination clauses, and any right of first refusal that may have been granted to tenants. Ohio law requires honoring existing leases even after property sale, so understanding these agreements is crucial.

While Ohio 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 lease rights, and explain the showing process. Include information about how showings will be conducted and the notice period tenants will receive before showings (Ohio requires 'reasonable notice' for entry, generally interpreted as 24 hours).

Ohio Revised Code Section 5302.30 requires sellers to complete a Residential Property Disclosure Form. This form must disclose known material defects affecting the property. When tenants occupy the property, be particularly thorough about documenting any maintenance issues they've reported. The disclosure must be provided to potential buyers before they enter into a purchase agreement.

An estoppel certificate confirms the terms of the lease agreement and that the tenant acknowledges the lease terms. This document protects the buyer by preventing tenants from later claiming different lease terms. While not required by Ohio law, this is a standard practice in real estate transactions involving rental properties. The certificate should verify the lease term, current rent amount, security deposit held, and that the landlord is not in default of any lease obligations.

Create a comprehensive rent roll document that details all current tenancies, including tenant names, unit numbers, lease start and end dates, monthly rent amounts, security deposit amounts, and payment history. This document is essential for potential buyers to understand the income potential and current tenant situation of the property.

Decide whether to sell the property with tenants in place or vacant. This decision should be based on lease terms, market conditions, and target buyers. If leases are long-term with no early termination provisions, selling with tenants in place may be your only legal option. If leases are month-to-month or ending soon, you might consider waiting until the property is vacant. Consult with a real estate attorney to understand your options based on specific lease terms.

If you decide selling the property vacant would be advantageous and tenants have the right to stay, consider offering a 'cash for keys' agreement. This voluntary agreement offers financial incentive for tenants to vacate early. Ohio law doesn't specifically address these agreements, but they must be voluntary and cannot involve harassment or coercion. The agreement should clearly state the move-out date, amount to be paid, condition the property must be left in, and when/how payment will be made.

If tenants are willing to terminate their lease early without a cash incentive, create a formal agreement documenting this arrangement. The agreement should include the agreed-upon move-out date, handling of the security deposit, and release of future rent obligations. Both parties should sign this document to make it legally binding.

Ohio Revised Code Section 5321.04(A)(8) requires landlords to give tenants 'reasonable notice' before entering the property, generally interpreted as 24 hours. Create a written policy for property showings that respects this requirement and tenant privacy. Consider setting specific showing hours and days to minimize disruption to tenants. Document this policy and share it with tenants and your real estate agent.

Work with your real estate agent or attorney to ensure the purchase agreement properly addresses the existence of tenants. The agreement should specify whether the property is being sold subject to existing leases and include contingencies related to estoppel certificates. In Ohio, the purchase agreement should explicitly state that leases will be assigned to the new owner at closing.

Ohio Revised Code Section 5321.16 governs security deposits. When selling tenant-occupied property, security deposits must be transferred to the new owner. Create an agreement documenting the transfer of all security deposits, including amounts, associated tenants, and accrued interest (if applicable). Ohio law requires landlords to pay interest on security deposits only if they exceed $50 and the tenant stays for 6 months or more in properties with 6 or more units.

This legal document transfers all rights and obligations under existing lease agreements from you to the buyer. Under Ohio law, the buyer automatically assumes the role of landlord, but a formal assignment document creates clear documentation of this transfer. The assignment should list all current leases being transferred and be included in closing documents.

After closing, Ohio law requires that tenants be notified of the change in ownership and provided with the new owner's name and address for official notices and rent payments. While this is technically the new owner's responsibility, coordinating this communication helps ensure a smooth transition. Provide tenants with written notice including the new owner's contact information and instructions for future rent payments.