Selling a House with Renters in Rhode Island: What Landlords Need to Know
Selling a property with existing tenants in Rhode Island requires careful navigation of state-specific landlord-tenant laws that protect renters' rights. Rhode Island law generally requires landlords to honor existing lease agreements during property transfers, with specific notice requirements and potential limitations on showing the property to prospective buyers.
Failure to follow Rhode Island's tenant protection laws during a property sale could result in legal complications, delayed closings, or potential lawsuits from tenants. Always consult with a real estate attorney familiar with Rhode Island landlord-tenant law before listing a tenant-occupied property for 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
Rhode Island Landlord-Tenant Act (R.I. Gen. Laws § 34-18-1 et seq.)
This is the primary law governing landlord-tenant relationships in Rhode Island. When selling a property with tenants, the new owner generally must honor existing lease agreements. Month-to-month tenancies can be terminated with proper notice, but fixed-term leases transfer with the property to the new owner.
Notice Requirements (R.I. Gen. Laws § 34-18-37)
When terminating a month-to-month tenancy in Rhode Island, landlords must provide at least 30 days' written notice. This applies to property owners who wish to sell and need vacant possession, but only if the tenant is on a month-to-month arrangement.
Security Deposit Transfer (R.I. Gen. Laws § 34-18-19)
When selling a rental property, the seller must transfer all security deposits to the new owner or return them to tenants. The new owner assumes liability for the security deposits and must provide written notice to tenants about the transfer of ownership.
Disclosure of Sale to Tenants (R.I. Gen. Laws § 34-18-22)
Rhode Island law requires landlords to disclose in writing to tenants the name and address of the new owner when a property is sold. This notice must be provided promptly after the sale is completed.
Right of Entry for Showings (R.I. Gen. Laws § 34-18-26)
Landlords in Rhode Island must provide reasonable notice (at least 24 hours) before entering a rental unit to show it to prospective buyers. The law balances the landlord's right to sell the property with the tenant's right to quiet enjoyment.
Prohibition Against Retaliatory Conduct (R.I. Gen. Laws § 34-18-46)
Landlords cannot retaliate against tenants who assert their legal rights. This means a landlord cannot evict or threaten to evict tenants simply because they refuse to leave voluntarily during a property sale if they have a valid lease.
Regional Variances
Rhode Island Regional Variances for Selling a House with Renters
Providence has additional tenant protections beyond state law. Landlords selling property with tenants must provide at least 60 days' notice (instead of the state minimum of 30 days) before requiring tenants to vacate. Additionally, if the tenant has lived in the property for more than 3 years, the city requires landlords to provide relocation assistance of $2,000 per unit.
Newport has special provisions for seasonal rental properties. If a property is sold during the summer tourist season (May-September), landlords must honor existing short-term rental agreements through their completion date, regardless of change in ownership, unless specific language in the lease allows for early termination upon sale.
Pawtucket has implemented a Tenant-Landlord Mediation Program that requires sellers of tenant-occupied properties to participate in mediation if requested by the tenant before eviction proceedings can begin. This program aims to find mutually agreeable solutions when a property changes hands.
Warwick requires sellers to disclose to potential buyers whether the property is tenant-occupied and provide details of all current lease agreements as part of the mandatory real estate disclosure forms. Failure to properly disclose tenant information can result in penalties and give buyers grounds to void the purchase agreement.
East Providence has enacted ordinances that give tenants the right of first refusal when a landlord decides to sell a property. Landlords must offer current tenants the opportunity to purchase the property at the same price and on the same terms as offered to third-party buyers before finalizing any sale.
Suggested Compliance Checklist
Review Existing Lease Agreements
1 days after startingCarefully review all current lease agreements to understand tenant rights, lease terms, and any provisions related to property sale. Rhode Island law requires that existing leases remain valid even after property ownership changes. Pay special attention to lease expiration dates, renewal options, and any special provisions that might affect the sale.
Prepare Notice to Tenants of Intent to Sell
7 days after startingWhile Rhode Island 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 conducted. Rhode Island requires that landlords provide 'reasonable notice' (typically 24-48 hours) before entering the property for showings.
Complete Property Disclosure Statement
14 days after startingRhode Island General Laws § 5-20.8-2 requires sellers to provide a Real Estate Sales Disclosure Form to potential buyers. This form must disclose all known material defects in 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 units.
Prepare Rent Roll
14 days after startingCreate a comprehensive rent roll document that details all current tenancies, including tenant names, unit numbers, monthly rent amounts, security deposit amounts, lease start and end dates, and any recurring issues or special arrangements. This document will be essential for potential buyers to understand the rental income and tenant situation.
Request Estoppel Certificates from Tenants
21 days after startingAsk each tenant to complete an estoppel certificate, which verifies the terms of their tenancy, current rent, security deposit amount, and confirms they have no claims against the landlord. While not legally required in Rhode Island, these certificates protect both seller and buyer by documenting the status of each tenancy at the time of sale.
Determine Strategy for Handling Tenants
21 days after startingDecide whether to sell the property with tenants in place or vacant. In Rhode Island, you cannot terminate month-to-month tenancies simply to sell the property without proper notice (30 days written notice required per R.I. Gen. Laws § 34-18-37). For fixed-term leases, you generally must wait until lease expiration unless the lease contains early termination provisions. Consider whether offering incentives for voluntary move-out might be appropriate.
Prepare Early Lease Termination Agreement (if applicable)
28 days after startingIf you and your tenants mutually agree to terminate the lease early to facilitate the sale, draft a formal agreement documenting this arrangement. This should include the agreed-upon move-out date, any financial compensation, handling of security deposits, and release of future obligations. Rhode Island law doesn't specifically address voluntary early termination, so clear documentation is essential.
Draft Cash for Keys Agreement (if applicable)
28 days after startingIf offering financial incentives for tenants to vacate before their lease ends, create a formal 'Cash for Keys' agreement. This document should clearly state the amount being offered, the required move-out date and condition, and that acceptance releases both parties from further lease obligations. Ensure compliance with Rhode Island's security deposit law (R.I. Gen. Laws § 34-18-19) if the agreement includes return of security deposit.
Coordinate Property Showings in Compliance with Law
30 days after startingWhen showing the property to potential buyers, comply with Rhode Island law regarding tenant privacy. R.I. Gen. Laws § 34-18-26 requires landlords to give 'reasonable notice' (generally interpreted as 24-48 hours) before entering a tenant's unit. Create a showing schedule that respects tenant rights while facilitating the sale process. Document all notices provided to tenants.
Prepare Real Estate Purchase Agreement with Tenant Provisions
45 days after startingWork with your real estate attorney to draft a purchase agreement that addresses the existence of tenants. The agreement should specify whether the property is being sold subject to existing leases, include representations about the status of all tenancies, and address security deposit transfers. Rhode Island law (R.I. Gen. Laws § 34-18-19) requires security deposits to be transferred to the new owner.
Prepare Assignment of Leases
60 days after startingDraft an assignment of leases document that formally transfers all landlord rights and obligations under existing leases to the new owner. This document should list all current leases being transferred and affirm that there are no undisclosed amendments or side agreements. While the sale itself legally transfers the leases, this document provides clarity and documentation of the specific leases being transferred.
Create Security Deposit Transfer Agreement
60 days after startingPrepare a formal agreement documenting the transfer of all security deposits to the new owner. Rhode Island law (R.I. Gen. Laws § 34-18-19) requires that security deposits be transferred to the new owner at closing. The agreement should list each tenant, their security deposit amount, and include acknowledgment that the new owner assumes all responsibilities related to these deposits.
Notify Tenants of New Ownership
65 days after startingAfter closing, ensure that tenants are properly notified of the change in ownership. Rhode Island law requires that tenants be informed of 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 and compliance with R.I. Gen. Laws § 34-18-20.
| Task | Description | Document | Days after starting |
|---|---|---|---|
| Review Existing Lease Agreements | Carefully review all current lease agreements to understand tenant rights, lease terms, and any provisions related to property sale. Rhode Island law requires that existing leases remain valid even after property ownership changes. Pay special attention to lease expiration dates, renewal options, and any special provisions that might affect the sale. | - | 1 |
| Prepare Notice to Tenants of Intent to Sell | While Rhode Island 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 conducted. Rhode Island requires that landlords provide 'reasonable notice' (typically 24-48 hours) before entering the property for showings. | Notice to Tenants of Intent to Sell | 7 |
| Complete Property Disclosure Statement | Rhode Island General Laws § 5-20.8-2 requires sellers to provide a Real Estate Sales Disclosure Form to potential buyers. This form must disclose all known material defects in 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 units. | Property Disclosure Statement | 14 |
| Prepare Rent Roll | Create a comprehensive rent roll document that details all current tenancies, including tenant names, unit numbers, monthly rent amounts, security deposit amounts, lease start and end dates, and any recurring issues or special arrangements. This document will be essential for potential buyers to understand the rental income and tenant situation. | Rent Roll | 14 |
| Request Estoppel Certificates from Tenants | Ask each tenant to complete an estoppel certificate, which verifies the terms of their tenancy, current rent, security deposit amount, and confirms they have no claims against the landlord. While not legally required in Rhode Island, these certificates protect both seller and buyer by documenting the status of each tenancy at the time of sale. | Estoppel Certificate | 21 |
| Determine Strategy for Handling Tenants | Decide whether to sell the property with tenants in place or vacant. In Rhode Island, you cannot terminate month-to-month tenancies simply to sell the property without proper notice (30 days written notice required per R.I. Gen. Laws § 34-18-37). For fixed-term leases, you generally must wait until lease expiration unless the lease contains early termination provisions. Consider whether offering incentives for voluntary move-out might be appropriate. | - | 21 |
| Prepare Early Lease Termination Agreement (if applicable) | If you and your tenants mutually agree to terminate the lease early to facilitate the sale, draft a formal agreement documenting this arrangement. This should include the agreed-upon move-out date, any financial compensation, handling of security deposits, and release of future obligations. Rhode Island law doesn't specifically address voluntary early termination, so clear documentation is essential. | Early Lease Termination Agreement | 28 |
| Draft Cash for Keys Agreement (if applicable) | If offering financial incentives for tenants to vacate before their lease ends, create a formal 'Cash for Keys' agreement. This document should clearly state the amount being offered, the required move-out date and condition, and that acceptance releases both parties from further lease obligations. Ensure compliance with Rhode Island's security deposit law (R.I. Gen. Laws § 34-18-19) if the agreement includes return of security deposit. | Cash for Keys Agreement | 28 |
| Coordinate Property Showings in Compliance with Law | When showing the property to potential buyers, comply with Rhode Island law regarding tenant privacy. R.I. Gen. Laws § 34-18-26 requires landlords to give 'reasonable notice' (generally interpreted as 24-48 hours) before entering a tenant's unit. Create a showing schedule that respects tenant rights while facilitating the sale process. Document all notices provided to tenants. | - | 30 |
| Prepare Real Estate Purchase Agreement with Tenant Provisions | Work with your real estate attorney to draft a purchase agreement that addresses the existence of tenants. The agreement should specify whether the property is being sold subject to existing leases, include representations about the status of all tenancies, and address security deposit transfers. Rhode Island law (R.I. Gen. Laws § 34-18-19) requires security deposits to be transferred to the new owner. | Real Estate Purchase Agreement | 45 |
| Prepare Assignment of Leases | Draft an assignment of leases document that formally transfers all landlord rights and obligations under existing leases to the new owner. This document should list all current leases being transferred and affirm that there are no undisclosed amendments or side agreements. While the sale itself legally transfers the leases, this document provides clarity and documentation of the specific leases being transferred. | Assignment of Leases | 60 |
| Create Security Deposit Transfer Agreement | Prepare a formal agreement documenting the transfer of all security deposits to the new owner. Rhode Island law (R.I. Gen. Laws § 34-18-19) requires that security deposits be transferred to the new owner at closing. The agreement should list each tenant, their security deposit amount, and include acknowledgment that the new owner assumes all responsibilities related to these deposits. | Security Deposit Transfer Agreement | 60 |
| Notify Tenants of New Ownership | After closing, ensure that tenants are properly notified of the change in ownership. Rhode Island law requires that tenants be informed of 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 and compliance with R.I. Gen. Laws § 34-18-20. | - | 65 |
Frequently Asked Questions
Yes, you can sell your house in Rhode Island even if you have tenants living in it. The property can be sold with the existing lease in place, and the new owner generally must honor the terms of that lease. This means the tenants have the right to stay until their lease expires, unless specific provisions in the lease state otherwise.
While Rhode Island law doesn't specifically require you to notify tenants of your intent to sell, it's considered best practice to provide written notice. This helps maintain good relations and can make the selling process smoother. However, you must provide proper notice before showing the property to potential buyers, typically 24-48 hours advance notice depending on your lease terms.
When you sell your property in Rhode Island, the lease transfers with the property to the new owner under the principle of 'successor in interest.' The new owner is bound by the terms of the existing lease and cannot terminate it simply because of the change in ownership. The only exceptions would be if the lease specifically allows for termination upon sale or if the property is being foreclosed upon.
No, you cannot evict tenants simply because you want to sell your property in Rhode Island. You can only evict tenants for legally valid reasons such as non-payment of rent, lease violations, or if you have a month-to-month tenancy and provide proper notice (30 days in Rhode Island). If you have a fixed-term lease with tenants, you must wait until the lease expires unless the tenants agree to terminate early.
In Rhode Island, landlords must provide 'reasonable notice' before entering a rental property, which is generally interpreted as at least 24 hours' notice. This applies to showing the property to prospective buyers as well. Your specific lease may require more notice, so check your lease agreement. It's also important to coordinate showings at reasonable times of day and to be respectful of tenants' privacy and schedules.
Yes, you can offer tenants financial incentives to vacate early, often called 'cash for keys.' This might include covering moving expenses, returning the security deposit in full, or offering a lump sum payment. Any such agreement should be documented in writing and signed by both parties. This approach can be mutually beneficial if you want to sell a vacant property, but tenants are under no obligation to accept such offers.
If your tenants are on a month-to-month lease in Rhode Island, you have more flexibility. You can terminate the tenancy by providing at least 30 days' written notice without needing to state a reason. This notice period must be timed to end on a rental payment date. The new owner would also have this same right after purchasing the property.
Rhode Island law does not automatically grant tenants a right of first refusal to purchase the property before it's sold to someone else. However, if your lease specifically includes such a provision, you would need to honor it. Some landlords do offer their tenants the first opportunity to purchase as a courtesy, but it's not legally required unless stipulated in the lease agreement.
When selling a tenant-occupied property in Rhode Island, you must make the same disclosures as with any residential property sale, including the Rhode Island Real Estate Sales Disclosure Form. Additionally, you should disclose the existence of all current leases, security deposits held, and any pending issues with tenants. Providing accurate information about rental income, expenses, and tenant payment history is also important for buyers considering the property as an investment.
When selling a rental property in Rhode Island, you must either transfer all 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. Rhode Island law requires that security deposits be kept in a separate account, and detailed records must be maintained. The transfer of these funds and responsibilities should be clearly outlined in your real estate purchase agreement.