You may sell a rented apartment at any time – the tenancy agreement continues unchanged, and the tenant does not have to move out. The decisive principle is “sale does not terminate the lease”: the buyer takes over the apartment together with the tenant and enters into the existing tenancy agreement. We explain what this means legally, who is eligible as a buyer, and how to properly prepare the sale with an ongoing tenancy.
What does “sale does not terminate the lease” mean?
If you sell an apartment that has already been handed over to the tenant, the purchaser automatically takes your place as landlord. This is governed by Section 566 of the German Civil Code (BGB) under the heading “sale does not terminate the lease”. The new owner assumes the tenancy agreement with all rights and obligations – at the same rent, for the same term and with the same agreements. Initially, nothing changes for the tenant except the landlord’s name.
The timing is important: the buyer only becomes the landlord and therefore the tenant’s contact person once they have been registered as the owner in the land register – not already at the notary appointment. Until then, you remain the landlord and receive the rent. The tenant only pays the new owner once the change of ownership has been notified to them in writing.
The rental deposit is also transferred: Under Section 566a of the German Civil Code (BGB), the purchaser assumes the rights and obligations arising from the security. You hand over the deposit, including accrued interest, to the buyer and record this in the purchase agreement. If the new owner does not return the deposit at the end of the tenancy, you remain secondarily liable as the former landlord – another reason to document the handover properly.
Who buys a rented apartment?
An occupied apartment appeals to a different group of buyers than a vacant one. Owner-occupiers are usually ruled out because they cannot move in while the tenant is living there. The typical interested parties are therefore investors seeking ongoing rental income and a predictable return – not a move-in date.
For you as the seller, this has two sides. In practice, the smaller pool of buyers often leads to a price reduction of around 10 to 30 percent compared with a comparable vacant apartment. Investors do not primarily assess the property based on the price per square metre, but on the relationship between the purchase price and Annual net cold rent – the so-called factor or multiplier. A solid, well-documented tenancy with a reliable tenant is your most important selling point here: It stands for stable income and reduces the risk from the buyer’s perspective.
Advantages and disadvantages of selling with a tenant
Whether selling while the property is rented is worthwhile depends on your situation:
- Advantage – no vacancy: You sell while the property is rented and do not bear any costs for an empty apartment until the transfer.
- Advantage – predictable figures: An existing tenancy agreement provides investors with exactly the key figures they need for their purchase decision.
- Advantage – no termination effort: You do not have to terminate the tenancy before the sale or wait for the property to be vacated.
- Disadvantage – smaller market: Owner-occupiers are no longer potential buyers, so the pool of interested parties is smaller.
- Disadvantage – price reduction: Rented apartments often achieve less than vacant properties in comparable locations.
- Disadvantage – restricted access: Viewings are only possible in agreement with the tenant.
Five steps to selling a rented apartment
Step 1: Organize the documents and tenancy
Review the tenancy agreement, the current rent amount, the latest service charge statements, and the security deposit statement. The more completely and properly the tenancy is documented, the more convincing it appears to investors.
Step 2: Determine a realistic price
Use the market-standard factor for rented properties in your area and the achievable rental yield as a guide. Take the usual discount compared with vacant apartments into account instead of basing the price on what owner-occupiers would pay.
Step 3: Involve the tenant
You do not need the tenant’s consent to the sale, but you depend on their cooperation for viewings. An early, factual conversation builds trust and makes scheduling appointments easier.
Step 4: Market specifically to investors
Put the key figures at the forefront of the listing: annual net cold rent, factor, service charges, and condition. Target investors specifically – for example, via real estate portals and metasearch engines such as TraumImmo.
Step 5: Notary appointment and handover
The notary notarizes the purchase agreement and initiates the land register entry. Specify the transfer of the tenancy agreement, security deposit, and rent payments in the contract, and inform the tenant jointly with the buyer in writing about the change of ownership.
Which documents do buyers need?
Investors primarily review the figures relating to the tenancy. Have the following ready:
- current tenancy agreement, including addenda
- proof of the current rent amount and rent payments
- latest operating and ancillary cost statements
- amount and proof of the rental deposit
- land register extract, floor plan and energy performance certificate
- for a condominium additionally: declaration of division, current minutes of the owners’ association meetings, budget plan and amount of the maintenance reserve
Which rights does the tenant retain?
The sale does not change the tenant’s legal position – this is the essence of “purchase does not break a tenancy”. Three points are particularly important:
- Viewings: The tenant must allow viewings with prospective buyers, but only after timely notice and within a reasonable framework. There is no statutory upper limit on frequency; the appointments must be coordinated with the tenant.
- Protection against termination: The change of ownership alone is not grounds for termination. The buyer may terminate only under the general conditions, for example in the event of a justified need for personal use.
- Blocking period following conversion: If the apartment was converted into condominium ownership only after it had been rented out, according to Section 577a BGB, the buyer may invoke personal use or realization at the earliest three years after the sale. In areas with a tight housing market, the federal states may extend this period by regulation to up to ten years.
In addition, the tenant may have a statutory right of first refusal upon conversion. As this special case has its own rules, we cover it in a separate guide.
FAQ on selling a rented apartment
Can I sell a rented apartment without the tenant’s consent?
Yes. You need neither the tenant’s consent nor prior notification to sell. The tenant only has to allow the buyer to conduct viewings and will be informed about the change of ownership after the sale.
Does the tenant have to move out after the sale?
No. Under Section 566 BGB, the tenancy agreement continues unchanged with the buyer. The sale alone is not grounds for termination.
What happens to the deposit?
Under Section 566a BGB, the deposit passes to the buyer. It transfer them together with interest and stipulate this in the purchase agreement. You remain liable for repayment at the end of the tenancy as a substitute if the new owner does not make it.
Will I get less money for a rented apartment?
Often, yes. Since mainly investors are potential buyers, the price is often 10 to 30 percent below that of a comparable vacant apartment. A well-functioning, properly documented tenancy mitigates the discount.
When may the buyer terminate the lease due to personal use?
Only under the general requirements of tenancy law. If the apartment was converted into condominium ownership after being rented out, the blocking period of at least three years under § 577a BGB also applies.
Is tax payable on the sale?
If you sell within ten years of the purchase and have not used the apartment yourself, speculation tax may be levied on the profit (§ 23 EStG). For rented investment properties, this is the usual case – include this tax in your calculation.
Conclusion: How to successfully sell with an ongoing tenancy agreement
Selling a rented apartment is straightforward as long as you know the rules: The tenant stays, the buyer enters into the tenancy agreement, and the security deposit and rent payments transfer with ownership. Your most important lever is a well-documented tenancy that demonstrates stable income to investors. Anyone who specifically targets the right group of buyers and discloses the figures can sell at a fair price even while the apartment is occupied.