Yes. The lease goes with the house, and your buyer becomes the landlord. In Maryland there is one step first: a rental property with three or fewer units has to be offered to the tenant before it goes to anyone else.
The step most Baltimore landlords do not know about
The Renters’ Rights and Stabilization Act of 2024 created a tenant exclusive negotiation period and right of first refusal. The provisions affecting renters and landlords took effect October 1, 2024. Maryland DHCD explains it plainly: “Landlords who plan to sell a property with 3 or fewer residential rental units must provide the current tenant(s) the first opportunity to make an offer to purchase the property.” See the Maryland DHCD Right of First Refusal page.
It applies to tenants named on the lease who have lived in a one, two, or three unit residential rental property for at least six months. Here is the sequence, from the State’s HB 693 FAQ.
- Before you list the property or offer it to anyone else, you notify the tenants. The tenant then has 30 days to make a good faith offer to purchase.
- If the tenant matches the material terms in your notice, you are required to accept. If the terms do not match, you have five days to counter, and the tenant has five days to accept or reject.
- Separately, if you receive an unsolicited third party offer, or intend to accept a third party offer for at least 10 percent less than the lowest price previously offered to a tenant, the tenant gets 30 days to match it.
- If the tenant declines or does not respond within 30 days, the right terminates and you can sell to a third party.
You are not required to sell below market. The State is explicit that the law only requires a sale to the tenant if they match your reasonable asking price or a fair market third party offer. Violations carry fines of up to $1,000 per violation. DHCD runs a portal where owners generate and deliver the required notices, and submitting through it satisfies the delivery obligation.
A long list of transfers is exempt, including transfers to close family, court ordered transfers such as a tax sale or foreclosure sale, transfers through will or probate, a deed in lieu of foreclosure, bankruptcy transfers, and any residential rental property with four or more units. If your situation is a tax sale, read how the Baltimore tax sale works before you assume anything.
The lease survives the sale. Both kinds.
Selling does not end a tenancy. The buyer takes the property subject to the lease and steps into your position as landlord. That is true whether the sale is to a retail buyer or to us.
Fixed term lease
It runs to the end of its term. A sale is not by itself a reason to terminate early, unless the lease contains a clause that says otherwise. Read the lease before you promise a buyer a vacant house.
Month to month
Under Maryland Real Property Article, Section 8-402, a landlord must give written notice of intent to terminate a month to month residential tenancy 60 days before the expiration of the tenancy. Plan around that calendar. A buyer who wants possession on day one and a tenant on a month to month are two different closing dates.
Baltimore paperwork a buyer will ask for
Get these together before you market the property. Missing them is the most common reason a tenant occupied Baltimore deal stalls.
- Rental license. Baltimore City DHCD states that all non owner occupied rental properties in the city must be licensed, with a passing third party inspection by a State licensed inspector and current lead certification for each unit. See property registration and rental licensing.
- Maryland lead registration. MDE requires all pre-1978 rental properties to be registered under the State lead law, with a dust inspection by an MDE accredited contractor before every change in occupancy. MDE also states new registration is required within 30 days after purchasing a rental property. See MDE rental property owners.
- Leases, ledgers, and deposits. Every signed lease, a rent ledger, and the security deposit accounting.
The security deposit does not stay with you
Under Real Property Section 8-203, a landlord may not hold a security deposit greater than one month’s rent, with a narrow utility assistance exception. Deposits accrue simple interest, must be returned with interest within 45 days after the end of the tenancy, and a landlord who withholds without a reasonable basis can be liable for up to threefold the withheld amount plus attorney’s fees. The statute also makes a successor in interest liable to the tenant for failure to return the deposit. Translation: the deposit and its interest transfer at settlement, and it is credited to the buyer on the settlement sheet. Do not spend it.
Occupied or vacant
Vacant is not automatically worth more. An occupied property with a real lease, a paying tenant, and clean records sells as an income asset and often to a better buyer. An empty Baltimore rowhome starts costing you the day the tenant leaves, which we cover in selling a vacant Baltimore property.
Delivering vacant possession makes sense when the tenant is not paying, the unit needs work no one can live through, or the buyer is a homeowner. Just do not sign a contract promising vacancy before you have checked the lease term and the notice calendar. Related items are in selling with a lien on the property and selling with open code violations.
We buy occupied houses
We do not need you to evict anyone or empty the house first. We buy tenant occupied Baltimore properties, take the leases, and handle the deposit transfer at settlement. REBA gives you a real number for the property in minutes, free, with no phone call required. If you would rather fix it up first without paying for it, look at the renovation partnership, or start with what your house is worth as is. When you want the number in writing, get your cash offer. The full picture is at selling a Baltimore house that needs work.
Before you act on this
This page is general information about how these processes work in Maryland. It is not
legal, tax, or financial advice, and your situation may turn on details this page cannot
know. Talk to a Maryland attorney or a licensed tax professional before you make a decision
you cannot reverse. If you are facing foreclosure, you can also speak with a HUD approved
housing counselor at no cost.
Questions people ask
Do I have to offer my house to my tenant before selling it in Maryland?
For a rental property with three or fewer units, yes. The Renters' Rights and Stabilization Act of 2024 gives tenants named on the lease who have lived there at least six months an exclusive negotiation period before you can list or offer the property to a third party. Several transfers are exempt.
Does the lease end when I sell the house?
No. The buyer takes the property subject to the existing lease and becomes the landlord. A fixed term lease runs to the end of its term, and a sale by itself is not grounds to terminate it early unless the lease says so. Read the lease before promising a buyer vacant possession.
How much notice do I give a month to month tenant in Maryland?
Maryland Real Property Section 8-402 requires a landlord to give written notice of intent to terminate a month to month residential tenancy 60 days before the expiration of the tenancy. Build that into your closing date rather than discovering it after you sign a contract.
What happens to the security deposit when I sell?
It transfers. Maryland Real Property Section 8-203 caps most residential deposits at one month's rent, requires interest, and makes a successor in interest liable to the tenant for failure to return the deposit. In practice the deposit plus accrued interest is credited to the buyer at settlement.
Is my house worth more vacant or with a tenant in it?
It depends on the buyer. An occupied property with a real lease, a paying tenant and clean records sells as an income asset. Vacant matters when the buyer is a homeowner, the unit needs work nobody can live through, or the tenant is not paying. Vacancy also starts costing you immediately.
Do I need a Baltimore City rental license to sell a rental property?
Baltimore City requires all non owner occupied rental properties to be licensed, with a passing third party inspection and current lead certification for each unit. Maryland also requires pre-1978 rentals to be registered with MDE. A buyer will ask for both, so gather the paperwork before you market the property.