Can I sell my rental house in Washington with tenants still living in it?
By Austin Hellickson, Managing Broker, LPT Realty6 min read
You can. The buyer takes the house subject to the existing lease, deposit and all. If you want it empty for the sale, state law lets you end the tenancy of a single-family house to sell it, with at least 90 days’ written notice and a genuine intent to sell, and cities such as Tacoma and Seattle add rules of their own.
The lease goes with the house
A sale doesn’t cancel a lease. When the deed records, the new owner steps into your place as landlord, and the tenant keeps the same rent, the same term, and the same rights they had the day before. A month-to-month tenant stays month-to-month. A tenant with eight months left on a one-year lease still has eight months left, whoever owns the house.
That shapes who is likely to buy and how the house gets shown, and it makes the first decision a practical one: sell the house occupied, or empty it first.
Sell it occupied or sell it empty
These are two different sales, and they attract two different buyers.
An occupied house sells mostly to investors: people who want a rental, or who are content to wait out a lease before they renovate. They look hard at the rent, the lease terms, the condition, and how reliably the tenant pays. A cash offer request through the Homexa® network is one way to reach them, since investor buyers are often comfortable taking over a lease. The cash offer page explains how a request works and why any offer usually comes in below an open-market price.
An empty house opens the door to owner-occupant buyers. Most of them are using a loan meant for a home they will live in, and those loans generally expect the buyer to move in soon after closing. A lease that runs past closing gets in the way. So does a house they can only see on someone else’s schedule. Emptying the house usually means more buyers and often a higher price, paid for with vacancy, lost rent, the cost of turning the unit over, and time.
| Sell it occupied | End the tenancy, then list | |
|---|---|---|
| Likely buyers | Investors, including cash buyers | Owner-occupants and investors |
| Rent | Keeps coming in until closing | Stops when the tenant moves out |
| Showings | Limited, on notice, around the tenant | Whenever the listing needs them |
| Preparation | Little, since someone lives there | Cleaning, repairs and paint after move-out |
| Timing | Can start now | At least 90 days of notice first, then prep |
Neither column wins for everyone. A well-kept house with a tenant who wants to stay, paying close to market rent, is exactly what some investors are hunting for. A tired house with a lease ending soon may be worth emptying, freshening up, and listing. If the rental has a converted garage or a basement unit that was never permitted, a financed buyer’s lender will care about it more than most investors do, which is its own conversation, covered in what happens when a house has unpermitted work.
The 90-day notice to sell a single-family house
Since 2021, Washington landlords generally need one of the causes listed in state law, RCW 59.18.650, to end a tenancy, and that includes a month-to-month tenancy. One of those causes is the owner choosing to sell a single-family house. It comes with strings:
- The notice has to be written and give at least 90 days before the date the tenant’s possession ends.
- It has to state the cause and the facts behind it. Notice rules are technical, so a homemade letter is a real risk.
- You have to mean it. If the house isn’t listed at a reasonable price with a brokerage or on the multiple listing service within 30 days after the tenant leaves, or if you pull it off the market or rent it to someone else within 90 days, the law presumes you never intended to sell, and the former tenant may have a claim against you.
A fixed-term lease adds another layer. The same statute says the sale cause doesn’t let you end a lease before its term is up unless the tenant agrees in writing and gets at least 60 days to move. That belongs with a landlord-tenant attorney before you serve anything. The Washington State Attorney General’s office and the local landlord associations publish plain guidance on current notice rules, and those rules have changed more than once in recent years, so check the current version before you borrow a form a friend used.
Some owners and tenants simply agree on a move-out date instead, sometimes with the owner covering moving costs. If you go that way, put the agreement in writing, keep it genuinely voluntary, and have an attorney read it first.
Tacoma, Seattle, and other cities with their own rules
State law is the floor. Several cities in Pierce and King County build on it.
Tacoma has its own Rental Housing Code, with notice periods and landlord obligations that can reach past the state’s. Seattle has long had a just-cause eviction ordinance and its own tenant protections, some of which limit when and how a tenancy can end. Other King County cities have passed their own versions. Lakewood runs a rental housing safety program that requires rentals to be registered, which a buyer planning to keep the house rented will ask about.
Check the rules for the jurisdiction the house actually sits in. In Pierce County a Tacoma or Puyallup mailing address can belong to a house in unincorporated Parkland, Midland, or South Hill, where state law and Pierce County rules govern. The city’s landlord-tenant office can tell you what applies, and an attorney can tell you how it applies to your particular lease.
Showing a house someone lives in
Washington lets a landlord enter to show the home to prospective buyers with at least one day’s notice of a specific time, and the tenant can’t unreasonably refuse. That is the legal minimum. A sale goes far better when the tenant is treated as part of it.
Talk to them before the sign goes up. Explain what you’re planning and what happens to their lease when the house sells. If showings will be frequent, a rent credit for the disruption is a fair gesture. Agree on set blocks of time for showings so the tenant can plan the week around them. Keep marketing photos to the exterior and the empty spaces, or ask permission before anyone photographs their belongings.
A tenant who feels ignored can make a house very hard to sell: dishes in the sink, a dog loose in the yard, a showing turned away at the door. A tenant who is kept informed usually cooperates, and one who expects to stay on with the new owner has every reason to.
Deposits, rent, and what the buyer takes over at closing
Escrow handles the handoff, but it only works with what you give it. Expect to provide:
- A copy of the current lease, with every amendment and addendum.
- A rent ledger showing the monthly rent, the due date, and what has been paid.
- The security deposit amount, any fees, and the move-in condition checklist the deposit depends on.
- Sometimes, a tenant estoppel letter signed by the tenant, confirming the rent and deposit and that there are no side agreements.
Rent for the month of closing is usually prorated, so you keep the days you owned the house and the buyer gets the rest. In Washington, deposits are held in a trust account, and on a sale they move to the new owner’s equivalent account, with the new owner telling the tenant where the money now sits. On the settlement statement this usually appears as a credit to the buyer. Keep your own record of the transfer. A deposit that goes missing in a sale has a way of coming back to the old landlord.
Selling a rental also raises tax questions that selling your own home doesn’t, including depreciation recapture and, if you plan to buy another rental, a possible 1031 exchange that has to be set up before closing, so bring your CPA in early. The state’s real estate excise tax applies the same way whether the buyer is an investor or a family moving in.
