NCEPR: Giving notice to landlord when buying a house

[redheadbaker]

We're required to give 60 days notice to our landlord when vacating. Our offer has been accepted, we've had our inspection and agreed on what will be fixed and what will be credited for repairs. We're still waiting for final mortgage approval (they still need the appraisal and documents from the title company). We're supposed to close on 6/6, but the sellers will rent back for a month. We're expecting to vacate the apartment by 7/31. 

When is it safe to give notice to our landlord? If we wait until closing, that will be less than 60 days. 

[Susie]

I would think you are safe once you are through inspection, appraisal, and mortgage approval.

ETA:  this assumes there are no contingencies on your purchase transaction, like seller finding home of choice.  But I imagine you'd have mentioned if anything like that was in play.

ETA2:  Last year we listed our old house for sale (analogous step?) after we were through inspection and mortgage approval on the new house, but before appraisal.  We were unpleasantly surprised that our new house came up $15k short in the appraisal, which meant we needed to bring an extra $15k in cash at closing to cover the gap.  It wasn't a dealbreaker, but the avoidance of any surprises like that, that could possibly put someone in a bind, are my reasoning for adding appraisal to the "pre-notice checklist."

[carmenere]

Once you get past appraisal, is there any reason to think you wouldn't get the final mortgage approval? If not then I'd say give notice after appraisal. (ETA I should have been more clear - you should be okay to give notice anytime after the appraisal.)

[redheadbaker]

May 12, 2022 14:17:42 GMT -5 carmenere said:

Once you get past appraisal, is there any reason to think you wouldn't get the final mortgage approval?

I don't think so? Nothing in our financial situation has changed, we haven't opened any new lines of credit. I don't know of any other reasons we wouldn't get final approval. 

[lemoncupcake]

If you close on 6/6 and give notice that day, can you pay rent through 8/6 or do you have to pay all of August? Can you swing a double payment that month? It is nice to be able to paint/clean or do projects before you fully move in.

[audette]

In our case, somehow our landlord simply intuited that we were buying a house, and put our rental on the market several days before we closed on the place we were buying. We found out when we got a text message after our closing that they were hoping that we would be OK with them showing the rental the next day to a potential buyer...



However, if that had not been the case, we were looking at trying to have a two month overlap between closing and exiting the rental. That gave us time to get some carpet replaced in the the new home, and arrange for movers, and all that. If we hadn't had stupid life stuff going on, we may have even found time to tackle the one home improvement thing we still want to get around to doing. Our closing was near the end of the month, though, so we just had a few days beyond two months to give us that time space.

So, I'm with lemoncupcake - if you can give 60 days notice and pay pro-rated rent to 8/6, I'd go with that. Best to be absolutely sure, if you can.

[redheadbaker]

May 12, 2022 15:18:54 GMT -5 lemoncupcake said:

If you close on 6/6 and give notice that day, can you pay rent through 8/6 or do you have to pay all of August? Can you swing a double payment that month? It is nice to be able to paint/clean or do projects before you fully move in.

No, we can't pay rent through 8/6, we'd have to pay through the end of the month. We can't swing a double payment. 

[lemoncupcake]

May 12, 2022 15:56:07 GMT -5 redheadbaker said:

May 12, 2022 15:18:54 GMT -5 lemoncupcake said:

If you close on 6/6 and give notice that day, can you pay rent through 8/6 or do you have to pay all of August? Can you swing a double payment that month? It is nice to be able to paint/clean or do projects before you fully move in.

No, we can't pay rent through 8/6, we'd have to pay through the end of the month. We can't swing a double payment. 

Then I think you will be confident by 5/31 that things are on track for a 6/6 closing and can give notice then. I wouldn’t give notice earlier just in case, and there’s no benefit to doing so. Good luck!

[StrawberryBlondie]

I think we did it when everything was essentially set for closing.

[livinitup]

Do you have a yearly lease or a month-to-month agreement?

I am answering your question without a full set of facts, but can set a stage for your “rights” as a tenant. Sort of.

Are you looking to break a lease “with 60 days notice”? Or not get evicted after giving notice in case the closing fails? Because the time and effort (and law (in most states)), strongly favors you from getting evicted if your move-out fails. Especially as a paying tenant in good standing. Just giving notice does not require you to vacate if stuff does not work out for you.

You just still live there. Legally.

[redheadbaker]

May 12, 2022 19:50:04 GMT -5 livinitup said:

Do you have a yearly lease or a month-to-month agreement?

I am answering your question without a full set of facts, but can set a stage for your “rights” as a tenant. Sort of.

Are you looking to break a lease “with 60 days notice”? Or not get evicted after giving notice in case the closing fails? Because the time and effort (and law (in most states)), strongly favors you from getting evicted if your move-out fails. Especially as a paying tenant in good standing. Just giving notice does not require you to vacate if stuff does not work out for you.

You just still live there. Legally.

We are in a month-to-month lease. Our concern is having a place to live if closing fails. 

[sonrisa]

May 12, 2022 20:47:32 GMT -5 redheadbaker said:

May 12, 2022 19:50:04 GMT -5 livinitup said:

Do you have a yearly lease or a month-to-month agreement?

I am answering your question without a full set of facts, but can set a stage for your “rights” as a tenant. Sort of.

Are you looking to break a lease “with 60 days notice”? Or not get evicted after giving notice in case the closing fails? Because the time and effort (and law (in most states)), strongly favors you from getting evicted if your move-out fails. Especially as a paying tenant in good standing. Just giving notice does not require you to vacate if stuff does not work out for you.

You just still live there. Legally.

We are in a month-to-month lease. Our concern is having a place to live if closing fails. 

Can you be upfront with your landlord about it? Talk to them on 5/30 and explain you would like to give 60 days notice, but would they allow you to rescind it on 6/6 if the closing falls through? Or absent that, would they allow you to pay a partial month's rent for the first six days of August? 

[wanderingback]

I would just tell your landlord what’s going on.

When I was in my final year of med school, match day was after I was supposed to give my landlord notice if I was moving. So I just asked him if I could wait a couple weeks to find out where I matched and if I was moving out of town. He said of course, no problem and it was totally fine. It doesn’t sound like you’d be asking to tell him a few days before moving out or anything.

[livinitup]

May 12, 2022 20:47:32 GMT -5 redheadbaker said:

May 12, 2022 19:50:04 GMT -5 livinitup said:

Do you have a yearly lease or a month-to-month agreement?

I am answering your question without a full set of facts, but can set a stage for your “rights” as a tenant. Sort of.

Are you looking to break a lease “with 60 days notice”? Or not get evicted after giving notice in case the closing fails? Because the time and effort (and law (in most states)), strongly favors you from getting evicted if your move-out fails. Especially as a paying tenant in good standing. Just giving notice does not require you to vacate if stuff does not work out for you.

You just still live there. Legally.

We are in a month-to-month lease. Our concern is having a place to live if closing fails. 

Then it makes sense to give 60 day notice that you plan to move contingent upon a successful closing. It is tricky because the landlord will do their do diligence to get a new tenant and with luck will have someone lined-up. But it is just a disappointment to the new tenant if you don’t move out. There are so many moving parts, the landlord might not have anyone or might use the time between tenants for upgrades. You would just resume with a month-to-month lease.

[suburbanzookeeper]

We gave notice on our rental at 60 days out and told them we were in escrow. When our new house flooded with a week to go in escrow, we asked if we could do two week rental beyond our original month-to-month agreement at the prorated amount and were given the all clear by our landlord. Not sure how long you've been in the rental but we had been in the rental several years and they wanted to replace carpet, repaint, do some kitchen updating, etc. before a new tenant would move in so it worked out all the way around. If it's an independent landlord, they may be more flexible than you think!

[dancelnow]

Can you talk with your landlord? As a landlord, I’d appreciate the heads up and it gives me time to plan especially if there are repairs I want to do in the turnover. I typically won’t place a new lease that far out so I’d let you back out and stay if it fell through 30 days out.

[tiki]

Rent is paid at the beginning of the month but mortgages are paid at the end of the month, so even if you have a one-month overlap, you likely won't have a double payment due: 

www.investopedia.com/mortgage/mortgage-rates/payment-structure/

When Mortgage Payments Start
The first mortgage payment is due one full month after the last day of the month in which the home purchase closed. Unlike rent, due on the first day of the month for that month, mortgage payments are paid in arrears, on the first day of the month but for the previous month.

Say a closing occurs on Jan. 25. The closing costs will include the accrued interest until the end of January. The first full mortgage payment, which is for February, is then due March 1.

[redheadbaker]

We just signed the month to month lease under the new owner, and the new lease mentions 30 days notice (vs 60 days under the previous one), so I am less stressed.