What Happens to Rent-Stabilized and Rent-Controlled Tenants When a Building Is Sold

The Short Version

A Sale Changes the Owner, Not the Tenancy

Rent control and rent stabilization attach to apartments and tenancies, not to owners. When a building is sold, every regulated tenant keeps every right they had the day before closing, and the buyer takes on every obligation the seller had.

Owners often worry that tenants must be told, consulted or relocated before a sale. In most cases none of that is required. Buyers of rent-stabilized buildings in Brooklyn expect occupied apartments, and the price already reflects the regulated rents. What matters most is that the records you hand over are accurate, because the buyer will rely on them and may hold you to them in the contract.

If you are not sure which of your apartments are rent controlled and which are rent stabilized, start with our guide to rent controlled vs. rent stabilized. The distinction affects what a buyer will pay but not whether tenants’ rights continue. Both survive a sale.

Leases and Status

What Happens to Leases, Rents and Regulated Status

Every lease continues, every legal rent stays the same and every unit keeps its regulated status. The buyer must keep offering renewals and follow the same rules on increases.

Rent-stabilized tenants

• Existing leases run to their end date on the same terms.
• Tenants keep the right to one- or two-year renewal leases on the required forms, at Rent Guidelines Board increases. For leases starting October 1, 2026 through September 30, 2027, that guideline is 0%.
• A preferential rent stays in place for the life of the tenancy; since 2019, future increases are calculated on the preferential rent.
• Family members who qualify for succession keep that right after a sale.

Rent-controlled tenants

• The tenant’s right to stay continues, whether or not there is a written lease.
• Rent stays within the Maximum Base Rent system, with yearly increases capped at the lesser of 7.5% or the five-year average of one-year guidelines.
• A qualifying family member can still claim succession under the same rules.

Free-market tenants in the same building

Free-market leases also continue to their end date. In many New York City buildings, the 2024 Good Cause Eviction law limits when an owner can refuse a renewal and treats increases above a local standard as presumptively unreasonable, unless an exemption applies, such as owning ten or fewer units statewide or a certificate of occupancy issued on or after January 1, 2009. A sale is not one of the law’s good causes, so a buyer of a covered building inherits the same limits.

At Closing

Security Deposits, Notices and Paperwork at Closing

The one notice New York law clearly requires on a sale concerns security deposits. The seller must transfer them to the buyer and tell each tenant, in writing and by registered or certified mail, who the new owner is.

Security deposits

Under the General Obligations Law, a seller must turn each tenant’s deposit over to the buyer at the delivery of the deed or within five days after, and notify the tenant by registered or certified mail of the new owner’s name and address. Once a buyer receives the deposits, it is responsible for returning them. In rent-stabilized buildings, the state Attorney General’s guidance says the buyer is responsible for returning deposits and interest even if it never received them from the prior owner. That is why buyers insist on a deposit schedule and a credit or transfer at closing.

Other transfers buyers expect

• A certified rent roll, copies of every lease and renewal, and riders.
• DHCR registration history for each stabilized unit, plus any rent-control records.
• Estoppel letters or tenant certifications, when the contract requires them.
• A list of pending housing court cases, DHCR complaints and any buyout agreements.

Is there any other required notice?

Outside the deposit notice, New York does not generally require an owner to notify tenants before a sale, and tenants do not have a general right of first refusal. That could change for some buildings. In October 2026, the City Council passed the Community Opportunity to Purchase Act (COPA), which would require owners of certain distressed multifamily buildings to give notice of a planned sale and give qualified nonprofits a first chance to buy and a right to match an outside offer. As reported in late October 2026, the Mayor was expected to sign it, and it would take effect about one year after enactment. Ask your attorney whether your building could be covered.

After Closing

What the New Owner Must Do With DHCR and HPD

The buyer becomes responsible for every registration going forward. Records the seller filed, or failed to file, stay attached to the building.

• DHCR annual rent registration. Every rent-stabilized apartment must be registered with the state each year. The new owner files future registrations, and gaps in the seller’s years remain in the record.
• HPD property registration. Owners of residential buildings with three or more units must register with HPD every year and whenever ownership changes, so a buyer files a new registration after closing.
• Rent-control filings. Maximum Base Rent orders and related filings continue for any controlled apartment.
• Notices and rent bills. Tenants need to know where to pay rent and how to reach the new owner for repairs.

Buyers care about the seller’s history because overcharge liability can follow the building. Since 2019, the overcharge look-back is generally six years, with treble damages for willful overcharges, and a 2023 law amended in 2024 allows a longer look-back where an owner engaged in a scheme to deregulate. Our guide to DHCR registration gaps and overcharge claims explains how that affects a sale.

Evictions

Can a New Owner Evict Rent-Stabilized Tenants?

Only on the same legal grounds available to the seller, and only through housing court. A sale is never a ground for eviction by itself.

Grounds that still exist

• Nonpayment of rent, through a housing court case.
• Holdovers for specific lease violations, nuisance or illegal use, after the required notices.
• Non-primary residence, where the tenant does not actually live in the apartment, which the owner must prove.
• Owner use of one unit for the owner or an immediate family member’s primary residence, limited since 2019 to one unit and requiring immediate and compelling need.

Cases already pending at closing continue, and the contract should say who controls them. Our guide to selling with non-paying tenants or a housing court case covers how buyers handle open cases and arrears.

Demolition and major renovation

Removing stabilized tenants to demolish or gut a building requires state approval and is difficult in practice. Many buyers of regulated Brooklyn buildings plan to renovate vacant units and common areas around the tenants who remain, not to empty the building.

Buyouts

Tenant Buyouts: What Sellers and Buyers May and May Not Do

A buyout, where a tenant voluntarily gives up an apartment in exchange for payment, is legal in New York City. The process is regulated, and mistakes can become harassment.

The rules

• When an owner or someone acting for the owner makes a buyout offer, city law requires written disclosure of the purpose of the contact, that the tenant may reject the offer and stay, that the tenant may consult an attorney, and that the tenant may refuse further contact in writing.
• After a tenant refuses in writing, the owner may not contact them about a buyout for 180 days, unless a court permits it or the tenant says in writing that they want offers.
• Repeated buyout offers, threats, lying about the tenant’s rights or contact after a refusal can be harassment under the city’s Housing Maintenance Code.
• Under the city’s Buyout Agreement Law, the owner must report the terms of a completed buyout to HPD within 90 days.

Practical advice

If you are selling, do not start buyout conversations to “clean up” the building for a buyer. You take on the legal risk, it delays your sale, and most buyers would rather price the building with tenants in place. If a tenant approaches you, involve an attorney before agreeing to anything, and disclose any signed agreement to the buyer.

Harassment

Harassment Law and the Certification of No Harassment

Harassment findings hurt sellers and buyers alike. They create penalties, can block future rent increases and can stop a building from getting major Department of Buildings permits for years.

Under city law, harassment includes conduct meant to make a tenant leave or give up rights: repeated buyout pressure, cutting off services, unnecessary construction disruption, baseless court cases and threats. Penalties and court orders can follow, and harassment findings can also affect an owner’s other buildings.

The Certification of No Harassment (CONH)

• Covered buildings must obtain a CONH from HPD before DOB will approve demolition, material alterations, changes in use or occupancy and similar work.
• Coverage currently includes buildings in certain special districts, including the Greenpoint-Williamsburg anti-harassment area, single room occupancy buildings, and buildings on HPD’s program list.
• In August 2026 the City Council passed a bill to make the program permanent, using a 60-month look-back and reaching buildings in common ownership with a building that had a harassment finding or a denied certification. As reported, it awaited the Mayor’s signature and would take effect 270 days after becoming law.
• If a CONH is denied, the owner may be barred from those permits for a period or must agree to a “cure” that creates affordable housing.

Buyers who plan to renovate check CONH status before they price. A clean tenant history is worth money.

Your Options

Selling With Tenants in Place

Selling occupied is normal, and for most regulated buildings it is the best path. Your job is to hand over accurate records; the buyer’s job is to price the building as it is.

Listing with a broker

A broker can market a well-documented occupied building to many buyers. Expect a diligence period in which buyers review leases, registrations and tenant history, and expect financed buyers’ lenders to do the same. See our guide on broker vs. direct buyer.

Selling directly to us

Red Hook Development buys rent-stabilized, rent-controlled and mixed buildings across Brooklyn, from Central Brooklyn to South Brooklyn, off-market, all-cash and as-is. We buy with tenants in place, we do not ask you to approach tenants, and we handle the deposit transfer and closing paperwork with your attorney. Start on our sell your rent-stabilized building page.

This guide is general information, not legal advice. Tenant, buyout and harassment rules are detailed and change often; talk with a New York landlord-tenant attorney before contacting tenants or signing a contract.