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

Gather and review all current lease agreements to understand tenant rights, lease terms, and expiration dates. In Oregon, tenants with fixed-term leases generally have the right to stay until the lease ends, even if the property is sold. Month-to-month tenants have different protections. Understanding these agreements is crucial before proceeding with the sale.

Oregon has specific tenant protections that vary by location and property type. For example, Portland has additional renter protections beyond state law. SB 608 (2019) provides statewide rent control and just-cause eviction protections. Properties less than 15 years old may be exempt from some rent control provisions. Single-family homes may have different rules than multi-unit buildings.

While Oregon law doesn't specifically require notifying tenants of intent to sell, providing written notice is a professional courtesy and helps maintain good relations. This notice should inform tenants of the upcoming sale, reassure them about their lease rights, and explain the showing process. Include information about how showings will be conducted and what tenants can expect during the sales process.

Oregon law (ORS 105.464) requires sellers to provide a property disclosure statement to potential buyers. This document must disclose known material defects and other property information. When tenants occupy the property, include information about existing leases, rental amounts, security deposits, and any ongoing tenant issues or maintenance requests.

Under Oregon law (ORS 90.322), landlords must give tenants at least 24 hours' notice before entering the property for showings. In some cities like Portland, 48 hours' notice may be required. Create a showing schedule and notification system that respects these requirements and minimizes disruption to tenants.

An estoppel certificate confirms the terms of the lease, current rent, security deposit amounts, and that the landlord is not in default. While not required by Oregon law, these certificates provide valuable verification for potential buyers about the status of existing leases and can prevent disputes after the sale.

Create a comprehensive rent roll that includes all current tenants, their lease terms, monthly rent amounts, security deposits, and payment histories. This document is essential for potential buyers to understand the income potential and tenant situation of the property.

If you prefer to sell the property vacant, research your legal options under Oregon law. For month-to-month tenancies, landlords can issue a 30-day no-cause termination notice for properties owned less than 3 years, or a 60-day notice for properties owned 3+ years. For fixed-term leases or properties subject to SB 608 protections, you may need to consider offering an Early Lease Termination Agreement or Cash for Keys Agreement. Remember that in Oregon, you generally cannot terminate tenancies just to sell a property unless specific exceptions apply.

If tenants agree to move out before their lease ends, create an agreement that outlines the terms, including move-out date, any financial incentives, and release of future rent obligations. This document should clearly state that the agreement is voluntary and mutually beneficial. Be aware that in Oregon, you cannot force tenants to terminate their lease early just because you're selling the property.

If offering financial incentives for tenants to vacate, create a formal agreement detailing the amount offered, move-out date, property condition requirements, and payment terms. This agreement should be clear that accepting the offer is voluntary. In tight rental markets like Portland, consider offering relocation assistance that meets or exceeds local requirements (which can be several thousand dollars depending on unit size).

Work with a real estate attorney to draft a purchase agreement that addresses the existing tenancies. Include provisions about whether the buyer will assume the leases, how security deposits will be handled, and any contingencies related to tenant occupancy. In Oregon, security deposits must be properly transferred to the new owner or returned to tenants.

Prepare a document that formally transfers all lease agreements from seller to buyer. This should include details of all current leases, tenant contact information, and acknowledgment that the buyer assumes all landlord responsibilities under the existing leases. In Oregon, the new owner automatically assumes the landlord's legal obligations, but a formal assignment provides clarity.

Draft an agreement documenting the transfer of all security deposits from seller to buyer. Under Oregon law (ORS 90.300), the person who receives the security deposit is responsible for its return. This document should include deposit amounts for each unit, any deductions already made, and acknowledgment of the buyer's responsibility to return deposits according to lease terms and Oregon law.

After the sale closes, Oregon law requires promptly notifying tenants of the change in ownership. This notice should include the new owner's name, address, and contact information for maintenance requests and rent payments. If property management will change, include those details as well.

If the property is in Portland, ensure compliance with additional local regulations, such as the Mandatory Renter Relocation Assistance Ordinance, which requires landlords to pay relocation assistance to tenants in certain circumstances. Portland also has stricter notice requirements and additional tenant protections beyond state law.