Yes, you can sell a Maryland house with a tenant living in it. The lease goes with the house, so the buyer takes over as landlord. The step most owners miss is the tenant’s right of first refusal: for a rental with three or fewer units, state law says the tenant gets the first chance to make an offer, in writing, before you put the house on the market.
If you’re thinking about selling a rental, start with our seller services page and a free home value request. We’ll price it both ways, tenant in place and vacant, so you can see which one nets more.
This is general information, not legal advice. Talk to a Maryland real estate attorney about your own lease and timeline.
The lease survives the sale
Selling the house doesn’t end the lease. The buyer takes title subject to it, and the tenant keeps every right the lease gives them: the rent, the term, the renewal terms, all of it.
For a seller, that means two things. First, the buyer you’re marketing to is either an investor who wants the rent or an owner-occupant who has to wait out the lease. Second, your listing has to be honest about the lease terms, because a buyer who plans to move in will ask when they can.
If the tenant is month-to-month, you have more room. Under Real Property § 8-402, a landlord ends a month-to-month residential tenancy with written notice at least 60 days before it expires, and a year-to-year tenancy with 90 days’ notice (checked October 2026). A fixed-term lease is different. You can’t end it early just because you want to sell, unless the lease has a clause allowing it or the tenant agrees.
Tenant right of first refusal: 3 or fewer units
This is the one that catches landlords. The Renters’ Rights and Stabilization Act of 2024 added a tenant right of first refusal, now at Real Property § 8-119. The Department of Housing and Community Development says in its HB 693 FAQ that the provisions affecting renters and landlords took effect October 1, 2024.
Here’s how it works, from the statute text as of October 2026:
- Who it covers. Residential rental property with three or fewer dwelling units. A “tenant” here means someone who has lived there at least 6 months and is a named lessee on the written lease.
- What you send. Before you offer the property to the public or anyone else, you send each tenant a written notice of their right to make an offer. The notice includes the material terms you’d accept and says plainly that it is a solicitation, not a contract. It goes by first-class mail with a certificate of mailing or by a tracked delivery service.
- Copy to the state. You also send a copy to the Office of Tenant and Landlord Affairs (OTLA). DHCD’s Right of First Refusal page has a portal that builds the forms, and forms filed through the portal don’t need to be mailed or emailed to OTLA separately.
- The clock. The tenant has 30 days after receiving the notice to deliver an offer. If they do, you have 5 days to accept or counteroffer, and the tenant has 5 days to answer a counteroffer. No answer counts as a no.
- Later offers. If you then get a third-party offer at least 10% below the lowest price you offered the tenant, or an offer on a home you never marketed, the tenant gets another written notice and 30 days to match it. COMAR 05.22.01.05 spells out the delivery rules and the reports you file with OTLA afterward.
The tenant can’t waive this right or sign it away, and an owner who violates the section faces a fine of $1,000 per violation.
Exemptions
The statute lists the transfers that skip all of this. The common ones for our sellers:
- A transfer to a family member
- A transfer by will, trust or inheritance, or by a fiduciary in an estate or trust
- Foreclosure, tax sale and other court-ordered sales, and a deed in lieu of foreclosure
- A transfer to a business entity you wholly own
- Any property with four or more units
If you inherited the rental, also read our post on selling an inherited house in Maryland.
Baltimore City’s opportunity-to-purchase law
Baltimore City had its own tenant purchase law for single-family rentals for years, in Article 13 of the City Code, later renamed the Councilmember Mary Pat Clarke Opportunity to Purchase Act. It had its own 14-day response windows and a separate filing with the city’s housing department.
The state law changes that picture. Section 8-119(g) says it preempts local laws on a tenant’s right to purchase, and the Maryland People’s Law Library notes the same thing (checked October 2026). In practice, a Baltimore City landlord now follows the state process above. Because older city forms still circulate, ask your settlement attorney to confirm what they want in the file before you list.
City rentals also need a current rental license. If yours has lapsed, sort that out before you go to market. Our post on the Baltimore City rental license covers it.
Showing notice and access
Maryland now has a statewide rule on landlord entry. Real Property § 8-221 lists showing the home “to prospective or actual purchasers” as an allowed reason to enter, with these conditions (statute text checked October 2026):
- Written notice at least 24 hours ahead, with the date, approximate time and purpose
- Delivery by first-class mail with a certificate of mailing, a paper notice on the door, or email or text if the tenant chose electronic notice
- Entry only between 7:00 a.m. and 7:00 p.m., Monday through Saturday, unless the tenant agrees in writing to another time
The tenant can agree in writing to shorter notice. That’s worth asking for. A tenant who has a say in the schedule is a lot more likely to leave the place picked up and the dog out of the house.
What we do on tenant-occupied listings: we set two or three showing windows a week, give the tenant the full schedule up front, and stack buyers into those windows. Fewer, bigger showings are easier on everyone.
Security deposit transfer to the buyer
The deposit doesn’t stay with you. Under Real Property § 8-203, when you sell, you deliver the deposit to the buyer with an accounting that shows:
- The amount and date of the original deposit
- The records needed to figure any interest owed
- The tenant’s name and last known address
If you don’t hand it over, you stay liable to both the tenant and the buyer for it. The buyer, as your successor, is also liable to the tenant for returning it. Your settlement company will usually show the deposit as a credit to the buyer on the settlement statement. Bring the original receipt and any move-in inspection report to closing.
For the rest of the deposit rules, see our Maryland landlord-tenant rules guide.
Selling to an investor with the tenant in place vs vacant
There’s no single right answer. It depends on the lease, the rent and the house.
| Tenant in place | Vacant | |
|---|---|---|
| Buyer pool | Mostly investors | Investors and owner-occupants |
| What drives price | Rent, lease terms, condition | Condition and comparable sales |
| Showings | Limited by § 8-221 notice and the tenant’s cooperation | Open schedule |
| Repairs before listing | Harder to do around a tenant | Easier, and photos look better |
| Your carrying cost | Rent keeps coming in | You pay the mortgage, taxes and utilities with no rent |
A tenant paying market rent on a solid lease can be a selling point to an investor, who gets income from day one. A tenant paying well under market, or a lease with a long time left, usually narrows the buyer pool and the price.
When we price a rental, we run both numbers. If the vacant price minus the months of lost rent and the cost of turning the unit still comes out ahead, waiting for the lease to end makes sense. Often it doesn’t.
Cash-for-keys, done lawfully
Cash-for-keys is a written deal where the tenant agrees to move out early in exchange for money. It’s legal in Maryland as long as it’s truly voluntary. The tenant can say no, and the lease stays in force if they do.
Done right, it looks like this:
- Offer it in writing, with the amount, the move-out date, and when and how you’ll pay.
- Tie payment to the tenant handing back the keys and leaving the unit broom-clean.
- Spell out how the security deposit will be handled. It’s still governed by § 8-203.
- Have both sides sign. A short agreement drafted by an attorney is cheap insurance.
What you can’t do is pressure the tenant out by cutting off utilities, changing the locks or skipping repairs. Those are illegal regardless of what you’re offering. And keep the right of first refusal in mind: the tenant moving out doesn’t erase a notice you were already required to send.
Timeline
A rough order of operations for a tenant-occupied rental with three or fewer units. Every lease and tenant is different, so treat this as a sequence, not a promise.
- Review the lease. Note the end date, renewal terms, any sale or early-termination clause, and the deposit amount.
- Get a value both ways. Tenant in place and vacant.
- Send the right-of-first-refusal notice and file it with OTLA, unless an exemption applies.
- Wait out the tenant’s 30-day window, plus the 5-day counteroffer steps if the tenant makes an offer.
- List the home, with showing windows set under § 8-221.
- Watch for the 10% rule. An offer well below what you offered the tenant can trigger a second notice and another 30 days.
- Settle, transferring the deposit and its accounting to the buyer.
The tax side of selling a rental (depreciation recapture, no home-sale exclusion) lives in our taxes when selling guide. If you’d rather keep the house and hand off the tenant, SW Property Management can take it over. And if you want to know what an investor would pay, our investors page explains how we work with them.
Bottom line
Selling with a tenant is normal and very doable in Maryland. Send the right-of-first-refusal notice first, give 24 hours’ written notice for showings, hand the deposit to the buyer at settlement, and don’t try to end a fixed lease early without the tenant’s signed agreement. Then compare the tenant-in-place and vacant numbers before you pick a path. Ask us for both numbers and we’ll walk through them with you.
Sources
- Maryland Code, Real Property § 8-119 (tenant right of first refusal), checked October 2026
- COMAR 05.22.01.05, notice requirements for the right of first refusal, checked October 2026
- Maryland DHCD, Right of First Refusal page and portal, checked October 2026
- Maryland DHCD, HB 693 FAQ (Renters’ Rights and Stabilization Act effective dates), checked October 2026
- Maryland Code, Real Property § 8-221 (landlord entry), checked October 2026
- Maryland Code, Real Property § 8-203 (security deposits), checked October 2026
- Maryland Code, Real Property § 8-402 (notice to end a tenancy), checked October 2026
- Maryland People’s Law Library, Baltimore City Tenant’s Right to Purchase, checked October 2026