Selling the property is not, by itself, a legal reason to make a New Jersey tenant leave. Do not serve notices or tell tenants to move because you have a buyer until an attorney has confirmed which ground applies, or you risk a case that delays the sale.
What the Anti-Eviction Act Means for a Sale
New Jersey's Anti-Eviction Act (section 2A:18-61.1 of the statutes) lists the only reasons a court can remove most residential tenants: unpaid rent, serious damage, repeated rule violations after notice and a short list of others. A change of ownership is not on that list. When the deed passes, the tenants generally stay under their existing arrangements and the buyer becomes their landlord.
There are two situations that work differently.
- Small owner-occupied buildings: the Act does not cover owner-occupied premises with no more than two rental units. If you live in one unit of a two- or three-family house, other notice rules apply, and an attorney can tell you which.
- Sale to a buyer who will live there: for a building of three residential units or fewer, the Act allows the owner to seek possession of a unit when the signed contract is with a purchaser who means to live in that unit, and the deal calls for vacant possession at settlement. The state's Truth in Renting guide says a notice to quit must be served at least two months before any court filing.
Neither exception helps if the buyer is an investor who plans to keep renting, which is the usual case when you sell an occupied building to a company like ours. For that kind of sale, the tenants stay and that is part of the price.
Security Deposits Move With the Building
Deposits are easy to get wrong in a New Jersey rental sale. The Security Deposit Act, N.J.S.A. 46:8-19 and the sections after it, puts duties on both sides.
- Before contract
Pull the deposit records
For every unit: the amount held, the bank and account it sits in, and the interest earned for the tenant.
- At or within 5 days of the deed
Hand over deposit and interest
The seller turns each deposit, plus the tenant's share of interest, over to the buyer.
- Same window
Notify each tenant
Send every tenant a letter by registered or certified mail saying the deposit has been transferred and giving the buyer's name and address.
- After the sale
The buyer is on the hook
Under the state's guidance, the new owner must collect the deposits and is responsible for returning them with interest whether or not the seller actually passed them on.
That last point is why careful buyers ask for a rent roll and deposit list early, and why the settlement statement can show the deposits as a credit from seller to buyer.
Registration, Inspections and Lead Paint
- Landlord registration: under the Landlord Identity Law, the owner of a one-unit rental, or of a two-unit building the owner does not occupy, registers with the town clerk, while multiple dwellings of three units and up register with the state Department of Community Affairs. A buyer files its own registration after closing.
- Lead-safe certificates: since a 2021 law, most rental dwellings built before 1978 must be inspected for lead-based paint hazards. The first inspection was due by July 22, 2024, and after that at three-year intervals, or sooner when a new tenant moves in. A lead-safe certificate is valid for two years. Buildings constructed in 1978 or later are exempt, as are some long-registered multiple dwellings with no open lead violations.
- Flood notice: New Jersey landlords must tell tenants about a unit's flood risk, alongside the seller's flood disclosure to a buyer.
- Local rules: many towns add their own. In Newark, every rental unit must be registered at $50 per unit, with an inspection at least every three years or at a change of occupancy, and any sale needs a Certificate of Continued Compliance, which costs $400 for one or two units and $500 for three to ten.
Gaps in any of these are not a reason to stop a sale to us. They do affect what a buyer will pay and how much work they inherit, so knowing where you stand helps you judge any offer.
Your Options, Side by Side
| Option | In practice | Suits you if | The catch |
|---|---|---|---|
| Hire a property manager | Keep the building; someone else handles tenants and repairs | The numbers work and you only want the day-to-day off your plate | Management fees, and the big decisions are still yours |
| Wait for leases to end, then list empty | Sell to owner-occupants at full market exposure | Tenants leave on their own and you can carry the vacancy | A tenant who stays has no duty to go; vacant units earn nothing |
| List occupied to investors | An agent markets the building with a rent roll | Rents are near market and the building is in good order | Investor lenders inspect closely, and showings disturb tenants |
| Agreed move-out payment | A written, voluntary deal: the tenant leaves by a date for a sum | A tenant is willing and you want the unit empty | It must be truly voluntary; get it drafted by an attorney |
| Sell to a cash buyer like us | Tenants, leases and deposits all come with the building | You are tired of the work, rents are behind, or the building needs repairs | Our price reflects the condition and the leases; compare it with a broker's opinion |
What to Gather Before You Call
- A rent roll: unit, tenant name, rent, lease end date, and any arrears
- The security deposit list, with the bank holding each deposit and the interest to date
- Copies of written leases, or a note of which tenants are month to month
- Your landlord registration, any lead-safe certificate, and recent inspection reports
- Utility arrangements: which meters are the tenants' and which are yours
How a Sale to Us Works With Tenants
We look at the building once, with a single visit to each unit at a time arranged with you and with proper notice to the tenants. We do not need the units empty, painted or repaired. Our written offer lists the price, the deposit credit, prorated rent and every cost on the settlement statement, including the Realty Transfer Fee, which New Jersey places on the seller.
At closing, the title company credits us the deposits and interest, you send the tenant letters, and from that day the tenants pay rent to us. If you have moved out of New Jersey, the non-resident closing form and any estimated tax payment are handled at the same table; see our relocating page for how that works. If a tenant has stopped paying and the house is also behind on its mortgage, read selling during foreclosure too.
Income property also raises tax questions, including depreciation recapture and whether a like-kind exchange makes sense. Ask your accountant about them early, since the closing year can change the answer.
The Department of Community Affairs publishes the Truth in Renting guide, the plainest summary of landlord and tenant duties in the state. Legal Services of New Jersey's hotline, 1-888-576-5529, helps tenants who qualify, and a landlord-tenant attorney can review notices before you serve them.