Can You Sell a House With a Tenant Living in It in Texas?

Yes, you can sell a house in Texas with a tenant living in it. A sale does not end the lease. The buyer takes the property subject to the tenant’s lease for the rest of its term, along with the security deposit, and the contract should include the Texas Real Estate Commission’s Addendum Regarding Residential Leases, form 51-1, which spells out who handles what.

The harder question is not whether you can. It is which buyer you are selling to, because that decides whether the tenant is an asset or an obstacle.

Two Buyers, Two Different Sales

An investor buying a rental wants the tenant. A signed lease and a history of on-time rent is income from the day they close, and it can make your house more attractive to them, not less.

A buyer who plans to live there wants the opposite. They need the house empty by a date their lender will accept, and a lease running six more months is a dealbreaker. If your lease runs well past your target closing date, your buyer pool is mostly investors. Price and market accordingly.

Here is how we usually see sellers handle it:

1. Sell to an investor with the lease in place. Least disruption, smaller buyer pool.
2. Wait for the lease to end, then list it empty. Largest buyer pool, but months of carrying the house.
3. Ask the tenant to agree to leave early. Usually with a move-out payment and a signed termination, so both sides have it in writing.
4. Let a month-to-month tenancy end. In Texas that generally takes at least one month’s written notice unless the agreement says otherwise.

The Deposit Follows the House

Texas Property Code Section 92.105 covers the security deposit when a rental changes hands. The seller stays responsible for that deposit until the new owner receives it or takes over the responsibility. The new owner then gives the tenant a signed statement saying they own the property, are responsible for the deposit and the exact amount.

In practice, the deposit moves at closing as a credit to the buyer, and the title company shows it on the settlement statement. Rent for the closing month is prorated the same way property taxes are. Give the title company a copy of every lease and the deposit amount early, so nobody is guessing the week of closing.

Showings With Someone Living There

This is where most tenant-occupied sales get bumpy. Texas law does not set a standard notice period for a landlord to enter, so the lease’s entry clause controls. Even when the lease allows showings with short notice, a tenant who feels ambushed can make the house look its worst.

What works better: tell the tenant before the sign goes up, set predictable showing windows, and offer a rent credit for their trouble if the listing will run a while. A cooperative tenant and a clean house sell faster than a strongly worded letter ever will.

Paperwork to Pull Before You List

Gather these before your first conversation with an agent:

• The current lease and any renewals or addenda
• The security deposit amount and where it is held
• The rent payment history for the last 12 months
• Any notices you have sent the tenant

Those go to buyers, the title company and the lender. For the rest of what a seller pays at closing, our breakdown of Houston seller closing costs covers the full list, and our Seller’s Guide walks through the whole sale.

The Move Live Love TX Team™ starts every tenant-occupied sale the same way: by reading the lease before anyone picks a list date. Here is what we would do if this were our house. Figure out who the buyer is first. The lease, the timing and the price all follow from that.

Frequently Asked Questions

Can you sell a rental house in Texas while a tenant still lives there?

Yes. Selling a house does not end a lease in Texas, so the buyer takes the property subject to the tenant's lease for the rest of its term. The contract should include TREC's Addendum Regarding Residential Leases, form 51-1, which covers how the leases and deposits are handled.

What happens to the tenant's security deposit when a Texas rental sells?

Under Texas Property Code Section 92.105, the seller stays responsible for the deposit until the new owner receives it or takes over that responsibility. The new owner then gives the tenant a signed statement saying they own the property, are responsible for the deposit and how much it is.

Can a tenant refuse showings when a Texas landlord is selling?

The lease controls access, because Texas law does not set a standard notice period for a landlord to enter. Read the lease's entry clause, give the tenant notice and reasonable windows anyway, and remember that a tenant who feels ambushed can make showings hard.

Can I end a tenant's lease so I can sell the house empty?

Not in the middle of a fixed-term lease unless the tenant agrees or the lease allows it. A month-to-month tenancy in Texas generally ends with at least one month's written notice, and many sellers offer a move-out payment to get a signed early termination.

Who gets the rent for the month the house closes?

Rent is prorated at closing in a Texas sale, the same way property taxes are. The seller keeps rent for the days before closing and credits the buyer for the days after, so it shows up as a line on both closing statements.