Selling a House with Renters in South Carolina: What Landlords Need to Know
Selling a property with existing tenants in South Carolina requires careful navigation of both landlord-tenant law and real estate regulations. South Carolina landlords must honor existing lease agreements when selling rental property, though several options exist for legally proceeding with a sale while respecting tenants' rights.
Failure to follow proper procedures when selling tenant-occupied property in South Carolina could result in legal disputes, delayed sales, or financial penalties. Always review the specific terms of your lease agreements and consider consulting with a real estate attorney before listing a tenant-occupied property.
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
South Carolina Residential Landlord and Tenant Act (S.C. Code Ann. § 27-40-101 et seq.)
This is the primary law governing landlord-tenant relationships in South Carolina. When selling a property with tenants, the new owner must honor existing lease agreements. The Act specifies that a change in ownership does not terminate or affect the tenant's rights under the existing lease.
Notice Requirements for Termination (S.C. Code Ann. § 27-40-770)
For month-to-month tenancies, landlords must provide at least 30 days' written notice before terminating the tenancy. For fixed-term leases, the landlord cannot terminate before the lease expires unless the tenant violates lease terms. This is relevant when selling a property as it affects when and how you can deliver possession to new owners.
Security Deposit Transfer (S.C. Code Ann. § 27-40-410)
When selling a property with tenants, the seller must transfer all security deposits to the new owner or return them to tenants. The new owner becomes responsible for the security deposits and must comply with all requirements regarding their handling and return.
Right of Entry (S.C. Code Ann. § 27-40-530)
Landlords must provide at least 24 hours' notice before entering a rental unit for non-emergency reasons, including showing the property to prospective buyers. This law is crucial during the selling process as it governs how and when you can show the property to potential buyers.
Disclosure of Sale to Tenants
While South Carolina law doesn't explicitly require notifying tenants of a property sale, best practices and common law principles suggest providing written notice to tenants when a property is being sold. This helps maintain good relations and reduces potential disputes during the transition.
Foreclosure Procedures (S.C. Code Ann. § 29-3-650 et seq.)
If the property is being sold due to foreclosure, special rules apply. The Protecting Tenants at Foreclosure Act (federal law) may provide additional protections to tenants, requiring the new owner to honor existing leases or provide at least 90 days' notice to vacate.
Regional Variances
Major Metropolitan Areas
Charleston has additional tenant protections requiring landlords to provide at least 60 days' written notice before terminating a month-to-month tenancy when selling a property. The city also requires sellers to disclose to potential buyers if the property is currently occupied by tenants and the terms of existing leases.
Columbia follows standard South Carolina landlord-tenant laws but has a local housing authority that offers mediation services for landlord-tenant disputes during property sales. Sellers in Columbia must also provide tenants with a disclosure form about their rights when the property is listed for sale.
Greenville has implemented a Tenant Notification Ordinance requiring landlords to provide at least 30 days' written notice to tenants before showing the property to potential buyers. Additionally, the city requires sellers to offer tenants first right of refusal before selling to another buyer.
Coastal Communities
Hilton Head has special provisions for vacation rental properties being sold with existing tenants. Long-term leases must be honored, but short-term vacation rental agreements can be terminated with 45 days' notice and appropriate compensation to the renter if the property is sold.
Myrtle Beach has specific regulations for selling properties with seasonal renters. The city requires sellers to honor all existing vacation rental contracts through the current season, even after the sale closes. New owners must honor these commitments or provide alternative accommodations of equal or greater value.
University Towns
Clemson has special provisions for student housing. When selling rental properties near Clemson University, landlords must honor existing leases through the academic year. The city also requires additional notice periods (minimum 90 days) for terminating leases when selling properties primarily rented to students.
Rock Hill, home to Winthrop University, has local ordinances requiring landlords selling properties to provide student tenants with at least 60 days' notice before termination and must allow students to complete the current semester before vacating, even if the standard lease would otherwise terminate earlier.
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. South Carolina law requires that existing leases remain valid even when ownership changes. Pay special attention to lease duration, renewal options, and any clauses that might affect the sale process.
Prepare Notice to Tenants of Intent to Sell
3 days after startingWhile South Carolina 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.
Complete South Carolina Property Disclosure Statement
7 days after startingSouth Carolina Code § 27-50-10 through § 27-50-110 (Residential Property Condition Disclosure Act) requires sellers to provide a written disclosure statement to purchasers. This must include known material defects that could affect the property's value. When tenants occupy the property, note any tenant-reported issues or maintenance concerns.
Coordinate Property Showings in Compliance with Tenant Rights
10 days after startingSouth Carolina law requires landlords to provide reasonable notice before entering a rental property, typically 24 hours. Schedule showings with proper notice and respect tenants' rights to quiet enjoyment. Consider creating a showing schedule that minimizes disruption to tenants.
Request Estoppel Certificate from Tenants
14 days after startingAn estoppel certificate confirms the terms of the lease, current rent amount, security deposit held, and that the tenant has no claims against the landlord. While not legally required in South Carolina, this document protects both seller and buyer by documenting the current status of the tenancy.
Prepare Rent Roll Documentation
15 days after startingCreate a comprehensive rent roll that includes all current tenants, monthly rent amounts, security deposits held, lease start and end dates, and any outstanding issues. This document is essential for the buyer to understand the rental income and obligations they will assume.
Evaluate Options for Vacant Possession vs. Selling with Tenants
20 days after startingDecide whether to sell the property with tenants in place or seek vacant possession. If seeking vacant possession, you must either wait for leases to expire naturally or explore legal early termination options. In South Carolina, you cannot simply evict tenants because you want to sell the property if they have a valid lease.
Consider Cash for Keys Agreement (If Applicable)
25 days after startingIf you prefer to sell the property vacant and tenants have valid leases, consider offering financial incentives for voluntary early termination. This 'cash for keys' approach must be documented in a written agreement that specifies the move-out date, amount to be paid, and condition requirements for the property upon vacancy.
Draft Early Lease Termination Agreement (If Applicable)
28 days after startingIf tenants agree to terminate their lease early without a cash incentive, document this agreement in writing. The agreement should include the move-out date, any fees being waived, and confirmation that both parties voluntarily agree to end the lease early.
Prepare Real Estate Purchase Agreement with Tenant Provisions
35 days after startingEnsure your purchase agreement specifically addresses the existence of tenants. Include language that either: (1) requires the buyer to honor existing leases, or (2) makes the sale contingent on delivering vacant possession. Attach copies of all leases as exhibits to the purchase agreement.
Prepare Assignment of Leases
40 days after startingDraft a 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 confirm the buyer's agreement to assume all landlord responsibilities under those leases.
Create Security Deposit Transfer Agreement
42 days after startingSouth Carolina Code § 27-40-410 requires landlords to transfer all security deposits to the new owner or return them to tenants when selling property. Document the exact amounts being transferred for each unit and have both buyer and seller sign acknowledging the transfer of these funds at closing.
Notify Tenants of New Ownership
45 days after startingAfter closing, South Carolina law requires that tenants be notified of the change in ownership and provided with the new owner's name and address for service of process and payment of rent. This should be done in writing immediately after closing.
File Appropriate Tax Documentation
60 days after startingEnsure you properly document the sale of rental property for tax purposes. South Carolina requires sellers to file state tax forms reporting the sale of real property. Consult with a tax professional regarding potential capital gains implications and any available exemptions.
| 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. South Carolina law requires that existing leases remain valid even when ownership changes. Pay special attention to lease duration, renewal options, and any clauses that might affect the sale process. | - | 1 |
| Prepare Notice to Tenants of Intent to Sell | While South Carolina 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. | Notice to Tenants of Intent to Sell | 3 |
| Complete South Carolina Property Disclosure Statement | South Carolina Code § 27-50-10 through § 27-50-110 (Residential Property Condition Disclosure Act) requires sellers to provide a written disclosure statement to purchasers. This must include known material defects that could affect the property's value. When tenants occupy the property, note any tenant-reported issues or maintenance concerns. | Property Disclosure Statement | 7 |
| Coordinate Property Showings in Compliance with Tenant Rights | South Carolina law requires landlords to provide reasonable notice before entering a rental property, typically 24 hours. Schedule showings with proper notice and respect tenants' rights to quiet enjoyment. Consider creating a showing schedule that minimizes disruption to tenants. | - | 10 |
| Request Estoppel Certificate from Tenants | An estoppel certificate confirms the terms of the lease, current rent amount, security deposit held, and that the tenant has no claims against the landlord. While not legally required in South Carolina, this document protects both seller and buyer by documenting the current status of the tenancy. | Estoppel Certificate | 14 |
| Prepare Rent Roll Documentation | Create a comprehensive rent roll that includes all current tenants, monthly rent amounts, security deposits held, lease start and end dates, and any outstanding issues. This document is essential for the buyer to understand the rental income and obligations they will assume. | Rent Roll | 15 |
| Evaluate Options for Vacant Possession vs. Selling with Tenants | Decide whether to sell the property with tenants in place or seek vacant possession. If seeking vacant possession, you must either wait for leases to expire naturally or explore legal early termination options. In South Carolina, you cannot simply evict tenants because you want to sell the property if they have a valid lease. | - | 20 |
| Consider Cash for Keys Agreement (If Applicable) | If you prefer to sell the property vacant and tenants have valid leases, consider offering financial incentives for voluntary early termination. This 'cash for keys' approach must be documented in a written agreement that specifies the move-out date, amount to be paid, and condition requirements for the property upon vacancy. | Cash for Keys Agreement | 25 |
| Draft Early Lease Termination Agreement (If Applicable) | If tenants agree to terminate their lease early without a cash incentive, document this agreement in writing. The agreement should include the move-out date, any fees being waived, and confirmation that both parties voluntarily agree to end the lease early. | Early Lease Termination Agreement | 28 |
| Prepare Real Estate Purchase Agreement with Tenant Provisions | Ensure your purchase agreement specifically addresses the existence of tenants. Include language that either: (1) requires the buyer to honor existing leases, or (2) makes the sale contingent on delivering vacant possession. Attach copies of all leases as exhibits to the purchase agreement. | Real Estate Purchase Agreement | 35 |
| Prepare Assignment of Leases | Draft a 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 confirm the buyer's agreement to assume all landlord responsibilities under those leases. | Assignment of Leases | 40 |
| Create Security Deposit Transfer Agreement | South Carolina Code § 27-40-410 requires landlords to transfer all security deposits to the new owner or return them to tenants when selling property. Document the exact amounts being transferred for each unit and have both buyer and seller sign acknowledging the transfer of these funds at closing. | Security Deposit Transfer Agreement | 42 |
| Notify Tenants of New Ownership | After closing, South Carolina law requires that tenants be notified of the change in ownership and provided with the new owner's name and address for service of process and payment of rent. This should be done in writing immediately after closing. | - | 45 |
| File Appropriate Tax Documentation | Ensure you properly document the sale of rental property for tax purposes. South Carolina requires sellers to file state tax forms reporting the sale of real property. Consult with a tax professional regarding potential capital gains implications and any available exemptions. | - | 60 |
Frequently Asked Questions
Yes, you can sell your house in South Carolina even if you have tenants living in it. However, the sale does not automatically terminate the existing lease agreement. The new owner generally must honor the terms of any existing lease until it expires, as the lease agreement transfers with the property (subject to certain exceptions).
While South Carolina law doesn't specifically require landlords to notify tenants of a sale, it's considered best practice to inform your tenants about your intentions to sell. This courtesy helps maintain a good relationship and can make the showing process smoother. Your lease may also contain provisions about property access for showings that you'll need to follow.
In South Carolina, you cannot evict tenants simply because you want to sell the property. If the tenants have a fixed-term lease, they have the right to remain in the property until the lease expires, even if ownership changes. You can only evict tenants for valid reasons specified in South Carolina law, such as non-payment of rent, lease violations, or if the lease has expired and proper notice has been given.
South Carolina law requires landlords to 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 potential buyers as well. However, your specific lease agreement may have additional provisions regarding notice for entry, so be sure to review your lease terms.
When selling a rental property in South Carolina, you have two options for handling the security deposit: 1) Transfer the deposit to the new owner and notify tenants in writing about the transfer, or 2) Return the deposit to the tenants and let the new owner collect a new deposit. South Carolina law requires security deposits to be handled properly during property transfers, and the new owner becomes responsible for the deposit once transferred.
If there is an existing fixed-term lease in place, the new owner cannot raise the rent until that lease expires, as they must honor the terms of the current lease. Once the lease expires, the new owner can increase the rent with proper notice (typically 30 days for month-to-month tenancies in South Carolina). There are no rent control laws in South Carolina that limit how much the rent can be increased.
Whether to sell occupied or vacant depends on your specific situation. Selling vacant may appeal to owner-occupant buyers and potentially fetch a higher price, but you'll lose rental income during the selling process. Selling occupied appeals to investors looking for immediate rental income, but may limit your buyer pool. Consider factors like your target buyer, market conditions, lease terms, and financial situation when making this decision.
South Carolina requires sellers to complete a Residential Property Condition Disclosure Statement for most residential property sales, including rental properties. You must disclose known material defects that could affect the property's value. Additionally, you should disclose the existence of any current leases, tenant rights, and provide copies of all lease agreements to potential buyers. For properties built before 1978, federal law requires disclosure of known lead-based paint hazards.
While you can include special provisions in your sales contract, a clause attempting to automatically terminate existing leases would generally not be enforceable against the tenants in South Carolina. Tenants are not parties to your sales contract, and their lease rights are protected by law. The new owner typically must honor existing fixed-term leases until they expire, unless the lease itself contains an early termination clause specifically for property sales.
If your tenant has a month-to-month lease, you have more flexibility when selling. In South Carolina, you can terminate a month-to-month tenancy by providing at least 30 days' written notice to the tenant. This notice period must be timed to end on the periodic rental date (typically the day before rent is due). This allows you to deliver the property vacant to a new buyer if desired, though you should ensure your termination complies with all terms in the rental agreement.