A sale usually doesn't end the lease
In general, selling a rental doesn't cancel an existing lease. The buyer takes the house subject to the lease, and the tenant's security deposit and lease records transfer at closing. Most Alabama residential leases are covered by the Alabama Uniform Residential Landlord and Tenant Act, which also sets rules for entering a tenant's home, so plan any walkthrough with your tenant in advance.
Occupied rentals are a normal sale
Plenty of buyers want rentals that are already occupied, especially landlords who buy around Birmingham, Bessemer and the older parts of the metro. You don't need the tenant to move out first. Tell us whether the lease is month-to-month or for a fixed term, what the rent is, and whether payments are current.
What to have ready
- Copies of current leases and any amendments.
- The security deposit amount for each unit.
- Recent repair history and any open code issues.
- Utility arrangements: who pays what.
Problem tenants and evictions
If a tenant is behind on rent, tell the buyer up front. Evictions in Alabama go through the courts; never change locks or shut off utilities to force a tenant out. A landlord-tenant attorney can explain your options. Some buyers will purchase with an eviction in progress and some won't, so being upfront saves everyone time.
Selling in another state? See the Pennsylvania and West Virginia versions of this page.
General information, not legal, tax or financial advice. Laws and procedures change, so check with a licensed attorney, tax professional or HUD-approved housing counselor about your situation. UglyDuck is a home-buying and lead-generation service: we may buy your house ourselves or share your request with a trusted local buyer.