Definition
A tenant-occupied property is a home with renters living in it at the time it's sold. Existing leases generally survive the sale, which means the new buyer inherits the tenant, the remaining lease terms, and the security deposit already on file. Showings and inspections require advance notice and the tenant's cooperation, which can complicate a traditional listing if the tenant is uncooperative or the home is hard to access. That's why these properties often sell more smoothly to buyers who don't require repeated showings or an empty house to close. For landlords who want out without disrupting their tenant's housing, this kind of sale keeps everyone's situation stable through the transition. A lease survives the sale. When you sell a tenanted property, the buyer generally takes it subject to the existing lease and steps into your position as landlord, which means the lease terms, the rent and the security deposits transfer rather than terminate — and the security deposits must be accounted for and credited at closing.
Example
With nine months left on her tenant's lease and no willingness to accommodate weekend showings, Karen Michaels knew a traditional listing would be nearly impossible to market properly. Every agent she spoke with said buyers wanted to walk through an empty house, not one with someone else's furniture and a reluctant tenant answering the door, and a couple of agents even suggested waiting until the lease ended before listing at all, nearly a year away. Karen didn't want to hold onto a rental she was ready to be done with for that long. Instead, she found a cash buyer who was happy to purchase the property with the lease and rental income intact, which meant her tenant never had to worry about being displaced mid-lease or dealing with strangers walking through the home every weekend. The buyer only needed a single walkthrough and copies of the lease and security deposit records to finalize their offer. She sold her rental to that buyer, the tenant never had to move, and Karen was able to close without a single open house, wrapping up the sale in under three weeks. Karen said knowing her tenant's housing stayed stable through the sale made the whole decision easier emotionally, not just financially. Access is the other practical constraint. Tenants have a right to notice before showings under state law, so a tenanted house is harder to market conventionally and easier to sell to a buyer who does not need repeated access or a vacant walkthrough.