You can sell a Brooklyn house with tenants in it. The existing lease does not end because you sell; the buyer steps into your place as the new landlord.
When it comes to selling a property that is currently occupied, the real choice is between three paths: sell the property with the tenants still living there, give proper notice and wait for the unit to empty, or agree on a paid move-out. Which one works depends on the lease, the notice rules and whether New York’s Good Cause Eviction law covers your house.
Stock photos of two family homes and moving day. Photos: Beth Fitzpatrick, Haberdoedas Photography, Jan van der Wolf, Malcolm Garret, RDNE Stock project, SHVETS production on Pexels.
The short version
- A sale is not a legal reason to evict. It is not on the Good Cause law’s list of ten grounds.
- Many Midwood, Madison and Marine Park owners are exempt from Good Cause: owners of ten or fewer units in the state, and owners who live in a building of ten or fewer units.
- Exempt or not, ending a tenancy takes written notice: 30 days, 60 days or 90 days, depending on how long the tenant has lived there.
- A paid move-out is legal in New York City, but the offer has written rules. A tenant who says no in writing cannot be asked again for 180 days.
On this page
How to sell a house with tenants: three options for a Brooklyn rental property
Here are the paths, side by side. If you are trying to sell a tenant-occupied property, the same logic works for a two family house with one renter and a three family house with two.
| Option | How it works | Good for | Watch out for |
|---|---|---|---|
| Sell with the tenant in place | The house is sold with the tenants still in it. The buyer takes over the lease and the security deposit. | Investors who want an investment property with rental income. | Fewer buyers who want to live in the unit, so the price can be lower. |
| Give notice and deliver it empty | Wait until the tenants have moved out at the end of the lease, or end a month-to-month tenancy with proper notice. | Buyers who want to live in the house or use the unit for family. | If the tenant does not leave, only a court can remove them, and that takes time. |
| Agree on a paid move-out | You pay the tenant to leave by a set date, in writing. | A fixed timeline, if you want to sell the property quickly. | New York City’s buyout rules apply. Follow them to the letter. |
There is a fourth, quieter option: offer the house to the current tenant first. A good tenant who already lives there knows the building, and some want to buy. If you are ready to sell, that conversation costs nothing, and buying a property they already know can suit a tenant well.
Before you list a house with tenants, answer four questions
1. Is there a lease?
A lease runs to its end date and passes to the buyer. A month-to-month tenancy can be ended with notice.
2. Is the house exempt from Good Cause?
Small landlords and owner-occupied buildings of up to ten units usually are. Ask your lawyer to confirm.
3. Is any unit illegal?
A basement or cellar unit without a certificate changes everything. Find out before you list.
4. Who is your buyer?
An investor wants the lease and rent roll. A buyer who will live there wants the unit empty.
New York Real Property Law sections 211 to 216 and 226-c; Multiple Dwelling Law section 302.
Does Good Cause Eviction apply to your rental property?
New York’s Good Cause Eviction law took effect on April 20, 2024 and applies in New York City automatically. Where it applies, an owner cannot remove a tenant, or refuse to renew a lease, except for one of ten listed reasons. Selling the house is not one of them.
But a lot of small Brooklyn houses are exempt. The two exemptions that matter most here:
- Small landlords. If you own ten or fewer rental units in the whole state, you are exempt. The test counts every unit each owner holds, not just the units in this house.
- Owner-occupied buildings. If you live in the building and it has ten or fewer units, it is exempt even if you own more elsewhere.
Units that are already rent stabilized, condo and co-op units, and rents above 245% of the federal fair market rent are also outside the law. Exempt owners still have to tell the tenant in writing that the unit is exempt, and why, when they send a non-renewal notice.
Outside expert, not affiliated with The Behfar Team
Now, it’s a little hard to tell exactly who’s going to be covered because of the exemption for [small landlords].
Vicki Been, faculty director of New York University’s Furman Center for Real Estate and Urban Policy and former New York City deputy mayor for housing, speaking to Brick Underground in May 2024.
One thing for your lawyer to think about during the process of selling. The small landlord test looks at the owner. If your buyer is a company whose owners hold more than ten units in the state, the house may be covered once they own it. That can matter to which buyers are interested and what they will pay.
Can the buyer move in?
The Good Cause law does allow an owner to recover a unit for their own home, or for a close family member’s, when no other suitable unit in the building is free. The owner has to prove good faith by clear and convincing evidence, and it does not apply to a tenant 65 or older or a disabled tenant. Whether a new buyer can rely on this right after closing is a question for a landlord-tenant lawyer.
Is the house rent stabilized?
Probably not. Rent stabilization generally applies to buildings built before 1974 with six or more units. A one, two or three family house is outside it unless it took certain city tax benefits. That also means this year’s rent freeze, a 0% increase voted 7 to 1 by the Rent Guidelines Board on June 25, 2026, does not apply to most tenants in these houses.
How much notice a tenant gets in New York
To end a month-to-month tenancy, or to tell a tenant you will not renew, you must give written notice. The length depends on how long the tenant has lived there or the length of the lease, whichever is longer.
| Tenant has lived there | Notice required |
|---|---|
| Less than one year, with no lease of a year or more | At least 30 days |
| One to two years, or a lease of one to two years | At least 60 days |
| More than two years, or a lease of two years or more | At least 90 days |
New York Real Property Law section 226-c, applied to New York City month-to-month tenants by section 232-a.
Late notice does not cancel the move-out. It pushes it back, and the tenancy continues on the same terms until the full notice period runs. Online forums get these numbers wrong often. One commenter in a New York City landlord thread said the 90 days applied after three years; the law says two.
The current tenant has the right to stay until a lease ends, sale or no sale. If a tenant does not leave after proper notice, only a court can remove them. That is a holdover case in Housing Court, and the court’s own guidance recommends a lawyer for it.
Outside expert, not affiliated with The Behfar Team
The big problem when the landlord or the owner tries to get them out is the delays in the court system that have not improved at all since COVID,
Daniel Pomerantz, a landlord attorney, speaking to Gothamist in April 2024 about Housing Court.
Cash for keys in New York City, done the legal way
Paying a tenant in a property to leave the property early is allowed. In New York City it is also tightly regulated, because a pushy buyout can count as tenant harassment.
- Put the first offer in writing, with the disclosures the city requires. There are eight of them, including that the tenant can say no and stay, can talk to a lawyer, and may not find another place at the same rent.
- Respect a no. If the tenant tells you in writing they do not want offers, you cannot contact them about a buyout for 180 days.
- Keep it calm. No threats, no contact at work without permission, no repeated calls or visits on weekends, holidays or outside business hours.
- Write the deal down. The amount, the move-out date, the condition of the unit and when the money is paid, signed by both sides. Have a lawyer draft it.
Outside expert, not affiliated with The Behfar Team
landowners who seek to buy out the rights of tenants in occupancy face a minefield of requirements and restrictions
Adam Leitman Bailey, founding partner of Adam Leitman Bailey, P.C., and Dov Treiman, a partner at the firm, writing about buyouts in the New York Law Journal. They were writing about rent regulated tenants, but the city’s buyout rules reach further.
What do buyouts cost? There is no official number. In a 270-comment thread this April, a family with a New York City three family house said a tenant asked for $25,000 to leave. One landlord replied: “I’m an NYC landlord. $25k is on the high end for cash for keys for a market rate tenant. I’ve done cash for keys twice, once for $2,000 and once for $7,000.” Another put it more bluntly: “In almost any situation it is better to just pay for the result instead of paying the attorney to fight about it.”
The basement apartment problem
Many Brooklyn houses have a basement or cellar apartment that was never legal. If you rent one, three things are true at once.
First, a two family house with a basement tenant becomes three families, which needs a certificate the house does not have. Second, New York’s Multiple Dwelling Law says no rent can be recovered for that period, and no case can be brought for nonpayment of it. Third, the city can order the unit vacated.
The city’s new basement legalization program will not help here yet. It is not taking applications until its rules are final, and in Brooklyn it only covers community districts 4, 10, 11 and 17. Midwood is in district 14, Madison in 15 and Marine Park in 18.
From a Brooklyn landlord thread
You could call Department of Buildings and report an illegal basement. They might issue a vacate order for him but there might be other consequences for you. Go talk to an attorney.
A reply in a 52-comment r/Landlord thread from September 2026, where a Brooklyn owner close to selling asked how to remove a basement tenant. The advice to see a lawyer first is right.
What tenants do to the price of a tenant-occupied property in Midwood, Madison and Marine Park
Two and three family houses are a real share of what sells in our neighborhoods, and in parts of southern Brooklyn they are most of it. We counted every house sale recorded this year.
Two and three family houses as a share of house sales, 2026
Of all one to three family houses sold January 1 to September 30, 2026, the share with two or three units.
NYC Department of Finance rolling sales, Brooklyn, file dated October 13, 2026.
| 2026 median sale | One family | Two family | Three family |
|---|---|---|---|
| Midwood | $1,440,000 (70 sales) | $1,340,000 (17) | $1,532,500 (6) |
| Madison | $1,250,000 (63 sales) | $1,350,000 (31) | $1,706,500 (6) |
| Marine Park | $818,000 (100 sales) | $965,000 (31) | $1,350,000 (3) |
| Sheepshead Bay | $915,000 (40 sales) | $1,084,000 (64) | $1,489,000 (15) |
NYC Department of Finance rolling sales, Brooklyn, file dated October 13, 2026. Sales recorded January 1 to September 30, 2026, at $100,000 or more. Three family counts are small in Midwood, Madison and Marine Park, so treat those medians as rough.
The city’s records do not say whether a house sold with tenants or empty, so nobody can measure the exact discount for an occupied property. The challenges of selling tenant-occupied properties come down to who can buy. An empty unit opens the house to buyers who want to live in the property, and a unit with a signed, current lease and a good payment record is what an investor wants to see. A messy middle, a tenant on a month-to-month with no paperwork, suits neither.
Selling a tenant-occupied rental property, step by step
- Decide before you list the property. Once you have decided to sell, choose between selling with tenants in place and waiting until the property is vacant. Your choice shapes who will purchase the property.
- Tell your tenants about the sale early. Explain their tenant rights in plain terms: the lease stays, tenants can stay in the property until it ends, and the new owner of the property takes over their deposit.
- Gather the numbers. Whether you keep the property rented or not, investors want to know what it generates in rent, what the expenses are and whether anyone is behind.
- Put the property on the market with clear showing rules. Agree times with tenants who are still living there, in writing.
- If a tenant agrees to leave, write it down. Some ask for money to move. In New York City that is a buyout, and the city’s rules apply.
- At closing, hand over what the buyer is owed. When the property is sold, the leases and security deposits pass to the buyer, and each tenant is told who now holds the deposit.
For property owners, the first two steps matter most, because a nervous tenant can make showings hard. The best way to sell an occupied rental property is usually the plainest: tell people early, put everything in writing, and keep your promises.
Working with tenants during the selling process
Selling a property with tenants goes far better with the existing tenant on your side. Tenants living in the house may worry that a new owner will raise the rent or ask them to leave, and a worried tenant can make showings hard. Tell them early, and tell them plainly what the sale means for their lease.
- Check the lease for access rules. Your lease should say how much notice you give before entering. Agree showing times in writing and keep to them.
- Know the law on refusals. Under the Good Cause law, a tenant who unreasonably refuses access to show the house to a buyer can give a covered owner grounds to act. It is a last resort, not a first move.
- Consider a thank-you. Some owners offer a small credit for a tidy unit and flexible showings. Keep any deal in writing.
- Use your property manager if you have one. A professional property management company can handle showing times and questions, so tenants deal with one person. Make sure your tenants know who to call.
Plan the listing photos around the tenants too. Photograph the vacant parts of the house, and ask before photographing anyone’s apartment.
The paperwork a buyer will ask for
- A copy of every current lease, or a note of the terms if there is none.
- The rent roll: who pays what, and whether anyone is behind.
- The security deposits. By law, you turn them over to the buyer at closing or within five days, and tell each tenant by registered or certified mail who now holds them.
- Any notices you have sent, including a Good Cause exemption notice.
Where The Behfar Team fits
Dealing with tenants is part of the job when we help you sell a two or three family house. We sell them in Midwood, Madison and Marine Park, with tenants and without. When it is time to sell your property, we can tell you what it is likely to sell for each way, so you can decide whether a move-out is worth paying for. See everything we do for sellers on our seller services page.
If you consider selling a property with a tenant, start with the numbers, then the law. We are not lawyers, and the legal steps here, from notices to buyout agreements, belong with a landlord-tenant attorney.
Questions sellers ask about selling with tenants
Can I sell a house with tenants in it in New York?
Yes, you can sell a property with tenants. A sale does not end the existing lease. The buyer becomes the landlord and takes over the lease and the security deposits, which you must transfer within five days of closing.
Can I evict a tenant because I am selling?
Not on that reason alone. A sale is not one of the ten grounds in the Good Cause Eviction law. If your house is exempt, you can end a month-to-month tenancy or decline to renew with proper written notice.
Does Good Cause Eviction apply to a two family house?
Often not. Owners of ten or fewer units in the state are exempt, and so are owner-occupied buildings with ten or fewer units. A two family house owned by a landlord with more units elsewhere can be covered.
How much notice do I have to give a tenant in NYC?
30 days if they have lived there under a year, 60 days for one to two years, and 90 days for more than two years, or the length of their lease if that is longer.
Is cash for keys legal in NYC?
Yes, if you follow the city’s rules. The offer must come with written disclosures, and if the tenant refuses in writing you cannot raise it again for 180 days.
Does the 2026 rent freeze apply to my tenant?
Only if the apartment is rent stabilized. Most one, two and three family houses are not, because stabilization generally needs six or more units in a building built before 1974.
Sources
- New York Real Property Law, Good Cause Eviction: section 211, section 214, section 216; NYS Attorney General, Good Cause Eviction Law.
- New York Real Property Law section 226-c and section 232-a; General Obligations Law section 7-105; Multiple Dwelling Law section 302.
- NYC Administrative Code section 27-2004 (buyout rules); NYC Department of Buildings, accessory dwelling units and basement legalization; NYC Housing Court, starting a holdover case.
- NYC Rent Guidelines Board, 2026 meetings and orders; NYC HPD, 2023 Housing and Vacancy Survey initial findings.
- NYC Department of Finance, rolling sales, Brooklyn, file dated October 13, 2026.
From The Behfar Team
We work from our office at 1524 East 23rd Street in Midwood and have closed 494 buyer and seller transactions. Our 145 Google reviews average 4.9 stars, and our agents speak six languages.
Find out what your house is worth, both ways
Before you sell your home, tell us about the house and the tenants. We will tell you what it is likely to sell for occupied and empty, so you can weigh the cost of a move-out. You can also call the office at 347-988-2526.
Laws and rules here are current as of October 2026, from New York State law, the New York State Attorney General and New York City agencies. The Good Cause law is set to expire on June 15, 2034 unless extended. This is general information, not legal advice.
