If you live in a rental property and buy a home, one of the most significant decisions is when to let your landlord know you are buying a house. What if you tell your landlord you’re leaving, and your house purchase falls through?
When should I tell my landlord I’m buying a house? In an ideal world, the best time to tell your landlord you are purchasing a house is just after you close the sale. This way, you know for sure you have bought the home, and you can move in at the end of the lease. However, there are other important considerations to take into account.
When Should I Tell My Landlord I’m Buying A House?
Even the most careful house buyer can find themselves with an unexpected issue. A home sale can fall through for any number of reasons, including during the closing meeting.
And I speak from experience.
When I was at the closing meeting for my first home, a mistake was noticed in the paperwork. Even though it had gone through several professionals, this one small thing slipped through and threatened the entire sale.
If I hadn’t had such a great realtor, who went above and beyond to help us, the sale would have fallen through there and then. – And on a side note, that’s why it’s so important to find a good realtor!
The Best Time To Tell Your Landlord You Are Buying A House
Consequently, the best time to tell your landlord you are buying a house is after you have signed the final paperwork and have the keys to your new home. Any sooner and you could find yourself out of your old home before you have somewhere else to live.
Other Advantages To Waiting
There are other advantages to waiting until after the closing meeting.
- The days before the closing meeting are both exciting and stressful. You have the excitement of buying your new home layered with a hefty dose of the “what if’s.” The last thing you want to do, if you can avoid it, is adding the worry of moving from your old home on the same day or very shortly afterward.
- By not moving into your new place, you can clean, decorate, or do anything else you might want to while the house is still empty.
- Many people moving from a rental to a home they own have to buy furniture and other essential supplies. Coordinating delivery and not having to go out and buy everything in one or two journeys will make the entire process much more enjoyable.
So, the ideal scenario is to wait, but is that a viable option for you? Before you make a decision, ask yourself the following questions.
Can You Swing It Financially?
Buying your home and keeping your rental for a few weeks to a month can seem like an additional financial burden you would want to avoid.
However, think of it like this.
Rent is usually paid in advance for the coming month. Mortgages are typically paid in arrears for the previous month.
Now imagine you buy your house on, say June 1st, and this is the day your rent is due. Your June 1st rent payment covers you until June 30th. Your first mortgage payment is likely due on July 1st. Therefore you do not have to pay rent and your mortgage for the same month.
So, look at when your rent is due, what period it will cover, and when your first mortgage payment must be made. It could be that you won’t be paying double in one month at all.
The Costs Of A Problem
There is also this to consider. If you give your landlord notice, and your sale falls through, where will you live? Will you have to scramble and find a short-term lease? Perhaps you’ll find yourself bearing the costs of a hotel or an AirB&B type rental.
Also, there are your belongings to think about. Will you have to pay for storage? If you do, storage lockers are usually on a 30-day lease, so you’ll have to pay for a full month. Then there is the cost of moving from your rental to a temporary home and then from your temporary home to your new house.
And that’s not even taking into account the stress and the hassle, taking extra time off work, and even asking friends and family to help you move – twice.
What Kind Of Relationship Do You Have With Your Landlord?
Whether you know your landlord well and what kind of relationship you have with them can have a significant impact on when you should tell them you are leaving.
If You Don’t Know Your Landlord – Or Don’t Get On
Suppose you rent from a landlord that is a company, social housing organization, or larger corporation. In that case, chances are you should wait until the last possible moment you can before handing in your notice to quit.
They are likely to have a new tenant lined up and ready to move in on the same day you move out. If anything goes wrong with your new home, you could find yourself without somewhere to live.
The same thing goes if you have a landlord you don’t know well or don’t get on with.
If You Know Your Landlord And Get On Well
If you rent from an individual, you know them well, and you are positive there will be some wiggle room if something goes wrong, you may be able to tell them sooner rather than later.
I once lived in a rental owned by an individual. He had purchase the property specifically to rent it out and earn a little extra money. I was the first tenant he had, and we had quite a relaxed relationship. If there were a minor problem, like a dripping tap, I would give him a call, ask if he’d like me to fix it, do the repair, and he’d drop by with the money I had spent.
Over the years, we built up a good relationship. I knew that when I gave him my notice to quit, there wouldn’t be a problem if I needed to stay on for a few days past my leaving date.
Don’t Rely On A Nice Building Manager
If you have a building manager, it doesn’t matter how nice they are or how well you get on. They may be obliged to rent out your unit asap and are likely to have a tenant lined up to take your place.
What Are The Terms Of Your Lease?
The terms of your lease may also dictate when to tell your landlord you are buying a house.
If you have a month-to-month lease, then, generally you must give 30 days’ notice. In this case, decide when, after the closing, you want to move out and give your notice accordingly.
So, if you close on May 10th and tell your landlord on May 11th that you are moving out, the last day of your tenancy will be June 9th.
However.
Some leases have additional wording and require your notice to run for a full rental period.
For example, let’s assume you pay your rent on the first of the month, and your lease requires a full rental period notice. If you tell your landlord you are moving out on, say, the 9th; your notice period will not begin until the 1st of the following month.
To make that crystal clear, let’s look at another example.
- You have to give one month’s notice, you pay your rent on May 1st, and give your notice on May 1st. You are responsible for the rent until May 31st.
- In the same rental, you give your notice on May 12th. Your tenancy does not end on June 12th. Instead, your notice runs from the first day of the next rental period, which is, in this case, June 1st. You are responsible for the rent until June 30th.
Does Your State Have Special Rules?
Just to throw another variable into the mix, the notice period can vary from state to state. And even within states, the notice period can depend on whether you have a written lease, how long you have lived in the unit, why you are leaving, and more. For example:
- Delaware. All tenancies: 60 days
- Florida. All tenancies: 15 days
- Hawaii. All tenancies: 28 days
- North Dakota. All tenancies: One calendar month
- Vermont.
- If you have a written lease and have lived there for less than two years – 30 days.
- If you have a written lease and have lived there for more than two years – 60 days.
- If you don’t have a written lease and have lived there for less than two years – 60 days.
- If you don’t have a written lease and have lived there for more than two years – 90 days.
- South Dakota. One month, unless the landlord has made a change to the tenancy at any point. In that case, the tenant can give 15 days.
Final Thoughts
Ideally, you should tell your landlord you are buying a house after you have signed your sales documents at closing. However, when making your decision, you should also consider the costs you will incur, what kinds of landlord you have, and the notice period for your lease.