Many Brooklyn brownstones and 2 to 4 family homes come with tenants. You can sell a home with tenants in place, and many buyers want exactly that. But tenant rights continue after a sale, and the rules for rent stabilized and free market apartments are different. Here is what owners should know before listing an occupied property.
Two Ways to Sell: Occupied or Vacant
Most owners choose one of two paths. You can sell the building with tenants in place, usually to an investor or an owner who wants rental income, or you can deliver one or more units vacant, which can widen the pool to buyers who plan to live there. Each path changes your timeline, your buyer pool and how the property is priced.
Leases Stay With the Building
A sale does not end a lease. The buyer generally takes the property subject to existing leases and tenancies, so tenants keep their rights after closing. Buyers will ask for a rent roll, copies of every lease, and for regulated units, the rent registration history.
Know Which Rules Apply to Each Apartment
- Rent stabilized apartments. Rent increases and lease renewals are set by state law and the NYC Rent Guidelines Board. Since the 2019 Housing Stability and Tenant Protection Act, units generally stay regulated, and recovering an apartment for an owner’s own use is limited to one unit and is hard to win in court.
- Free market apartments. Since April 20, 2024, the state Good Cause Eviction law covers many unregulated apartments in New York City. Important exemptions include owners of 10 or fewer units statewide and owner-occupied buildings with 10 or fewer apartments. Covered landlords need a good cause reason to end a tenancy.
- Notice periods. Ending a tenancy or raising rent by more than 5 percent requires advance written notice of 30, 60 or 90 days, depending on how long the tenant has lived there.
Getting this right before you list prevents surprises when a buyer’s attorney reviews the leases.
Security Deposits Must Be Transferred
Under New York General Obligations Law Section 7-105, the seller must turn over tenants’ security deposits to the buyer at closing or within five days after, and notify each tenant by registered or certified mail with the buyer’s name and address. Your attorney will usually handle this at closing.
Showings With Tenants in Place
- Check each lease for access and notice terms, and give tenants reasonable advance notice of every showing.
- Group showings into set windows to limit disruption.
- Use professional photos of vacant or owner-occupied rooms, and respect tenants’ privacy in their apartments.
- Good communication with tenants often leads to smoother showings and cleaner estoppel letters, the tenant statements buyers may request confirming rent and deposit amounts.
Delivering a Unit Vacant
If you want to deliver an apartment vacant, the path depends on the unit. A free market lease may end at expiration with proper notice, if Good Cause does not apply or you have a lawful reason. Some owners negotiate a voluntary move-out agreement. New York City has strict rules on buyout offers, including telling tenants in writing that they can decline, so speak with a landlord and tenant attorney before making any offer. Never pressure a tenant to leave.
How Buyers Price Occupied Buildings
Buyers of tenant-occupied homes and small buildings focus on income, expenses and the regulatory status of each unit. Over the 12 months ending September 30, 2026, Brooklyn recorded 872 sales of small apartment buildings at a median of $1,877,500, and 5,261 sales of 1 to 3 family homes at a median of $1,225,000, according to NYC Department of Finance records. A home that can be delivered with an owner’s unit vacant often appeals to more buyers than a fully occupied one.
Read more in our guides to 2 to 4 family homes, selling commercial property and the 1031 exchange and the 2026 Brooklyn market.
Frequently Asked Questions
Can I sell my house while tenants live there?
Yes. Tenants keep their lease rights after the sale, and the buyer becomes the new landlord.
Do I need my tenants’ permission to sell?
No. You do not need permission to sell, but you must respect the lease terms for access and notice during showings.
Will tenants lower my sale price?
It depends. Investors may value steady rental income, while buyers who plan to live in the home may pay more for vacant space. A private valuation can compare both paths for your property.
Who handles the security deposits?
They transfer to the buyer at or shortly after closing, with written notice to tenants. Your attorney coordinates this.
