Can you sell a two-family house in Newark with tenants living in it?

Yes. You can sell a two-family house in Newark with tenants in one unit or both. The leases stay in place and pass to the buyer, along with the tenants' security deposits. You can't make a tenant leave just because you're selling. New Jersey allows that only in a narrow case, so plan the sale around the people living there.

Two-families are all over Newark, from the Ironbound to the North Ward to Vailsburg. Many belong to people who inherited them, or to landlords who are worn out by the repairs and the rent collection.

What happens to the leases when the house sells?

The buyer becomes the landlord. Each lease keeps its rent, its end date and its terms, and a month-to-month tenant stays month to month. Before you sign a contract, collect a copy of every lease, the current rent for each unit and a note on anyone who is behind.

Tell the buyer about anything that isn't written down. A relative living upstairs for free, a tenant who pays in cash or a promise to fix the bathroom all become the buyer's business after closing, so they belong in the conversation before it.

Newark has rent control rules of its own. Before you quote a rent figure to a buyer, ask the city's rent control office whether your building is covered.

What happens to the tenants' security deposits?

The deposits go to the buyer. New Jersey requires the seller to turn over each tenant's deposit, plus any interest it has earned, to the new owner. The tenants also have to be told in writing who holds their money now and how to reach them. This happens at closing or just after, and the settlement agent can help with it.

If you can't find the deposit records, say so early. A buyer can plan around a missing record they know about. Finding out at the closing table slows everything down.

When can a tenant be asked to leave because of a sale?

New Jersey's eviction law protects tenants from being removed just because a house sells. One exception matters for two-families. In a building with three or fewer units, a tenant can be given notice to leave when the buyer will move into that unit and the sale contract requires it to be empty at closing. The tenant gets two months' notice, and the buyer has to move in.

That exception helps a sale to someone who wants to live in the house. It doesn't help a sale to an investor who plans to keep renting both units. Most investors buy with the tenants in place, so a cash sale usually leaves both units occupied.

A tenant who is behind on rent or breaking the lease is a separate matter with its own rules. Talk to a New Jersey landlord-tenant attorney before you send any notice.

What paperwork does New Jersey require before closing?

Before a one- or two-family house changes owners, New Jersey requires a certificate showing the smoke alarms, carbon monoxide alarms and a portable fire extinguisher meet state rules. The local fire official inspects the house and issues it. In Newark that means scheduling with the city's fire prevention office, so book it as soon as you have a closing date in mind.

New Jersey also requires lead-safe inspections for most rental units built before 1978. If you have a lead-safe certificate for either unit, give the buyer a copy.

Pay the water and sewer bills through closing. Unpaid city utility charges can become a lien on the house, and the settlement agent will want them cleared.

How a sale with tenants works with us

We buy Newark two-families with the tenants in place. You don't need to empty a unit, fix the boiler or collect back rent before we make an offer. There are no fees and no closing costs on our side.

Send the address, the rent for each unit and when each lease ends. We'll set the walkthrough around the tenants' schedules and make sure they get notice before anyone comes in. Call or text (443) 806-8068.

Selling a two-family house in Newark

How we buy houses in Essex County