When selling a rental property, landlords should be careful to take appropriate steps to ensure their obligations and liabilities terminate at the time of sale. One of the most important steps in protecting a landlord selling a rental property is to give notice of the sale to the tenants.
There is no statute or Iowa case law stating what must be included in a notice of sale to tenants. If the transfer of the property will result in the termination of the lease, the requirements for the notice are often set out in the lease agreement with the tenants. Regardless if the lease is terminated or not, a landlord should ensure they are in conformity with the requirements in the lease agreement when drafting a notice. You should consult with your attorney to ensure your notice is effective to terminate your liability.
No matter what is included in the notice, a notice is not effective unless it has been properly served on the tenant. Notice may be served using various methods, including: hand delivery to the tenant; delivery evidenced by an acknowledgement of delivery; personal service to the tenant; mailing by both regular and certified mail to the dwelling address; or a method of providing notice that results in the notice actually being received by the tenant.
A landlord selling rental property must also be careful to ensure the rental deposit is transferred to the correct person and that the correct parties are notified. A rental deposit may be transferred to either the tenant or to the person purchasing the rental property. Most of the time, a landlord conveys the rental deposit to the buyer, so they don’t have to request their own deposit from the tenants. If the deposit is transferred to the buyer, the landlord must provide notice to the tenant of the transfer and include the buyer’s name and address. This is often included in the notice described above.
The process of selling rental property can become confusing and complicated, especially if not done correctly. Providing notice to tenants and ensuring the rental deposit is correctly transferred are just two important steps in ensuring a transfer is completed effectively and the landlord selling the property is protected.