Selling a house and selling a house with a tenant in it are two different transactions. In South Carolina the second one carries obligations that survive the closing, and both the buyer and the seller can create real liability by handling them casually. The South Carolina Residential Landlord and Tenant Act (S.C. Code Ann. Title 27, Chapter 40) does not stop an owner from selling occupied property, but it does decide what happens to the lease, the security deposit, and the tenant's right to know who the landlord is now. This guide walks through each of those, with the exact statute sections, and separates what matters for the seller, the buyer, and the tenant.
The lease generally survives the sale
The starting point, and the point most sellers get wrong, is that a sale does not terminate an existing lease. A buyer who purchases a property that is subject to a rental agreement takes it subject to that tenancy. If the tenant has a fixed-term lease with six months left, the new owner steps into the seller's shoes and is bound by that lease for the remaining term. A month-to-month tenancy continues on the same terms until it is properly ended with statutory notice. The sale, by itself, is not a termination event and does not shorten the tenant's rights.
General rule, not a single code section. The Residential Landlord and Tenant Act does not contain one sentence that says "a lease survives a sale" in those words. It is the settled general rule of property and landlord-tenant law, and the Act assumes it throughout: Section 27-40-450 speaks of a landlord who "conveys the premises that include a dwelling unit subject to a rental agreement," which only makes sense if the rental agreement continues after the conveyance. The lease terms and the parties' own written agreement always control the specifics, so read the actual lease before closing.
The practical consequence: a buyer cannot treat existing tenants as trespassers or as at-will occupants to be removed at will. Ending a tenancy still requires the grounds and notice the Act sets out. If your plan is to occupy or renovate the property vacant, that has to be reconciled with the tenant's remaining lease term before you sign, not after.
Security deposits and prepaid rent: Section 27-40-450
This is the section that governs what happens to the money the tenant already paid. Section 27-40-450 does two things at once. It gives a selling landlord a way to be relieved of future liability, and it protects the tenant's security deposit by keeping the seller on the hook for it unless the deposit is properly transferred and the tenant is told in writing.
Read carefully, that establishes three moving parts:
- The seller's release from future liability is triggered by written notice to the tenant of the conveyance. Only events after that notice fall off the seller. A good-faith sale to a bona fide purchaser is the condition for the release.
- The deposit is the exception. Even after the sale, the seller "remains liable to the tenant for security recoverable by the tenant under Section 27-40-410" unless two things both happen: the deposit is actually transferred from seller to purchaser, and the tenant is notified in writing a reasonable time after the transaction.
- When both happen, liability shifts to the buyer. Once the deposit is transferred and the tenant is notified in writing, "the purchaser is liable under Section 27-40-410," which is the deposit-return statute. The buyer then owns the full deposit obligation, including the 30-day itemized return duty and its triple-damages penalty for wrongful withholding.
The takeaway for the seller is blunt: do not hand over the keys without handing over the deposit and documenting the written notice to the tenant. If you keep the deposit or transfer it informally with no written notice, you stay liable to the tenant for it, even though you no longer own the property or hold the funds. The same logic covers any prepaid rent the tenant paid ahead. Money the tenant has already paid for a period the buyer will now be collecting against should be credited to the buyer at closing and accounted for, so the tenant is never asked to pay the same rent twice.
Section 27-40-450 also addresses managers. A property manager who is not the owner is "relieved of liability under the rental agreement and this chapter as to events occurring after written notice to the tenant of the termination of his management." So if a management company is being replaced as part of the sale, that transition also runs on written notice to the tenant.
The new owner's disclosure duty: Section 27-40-420(b)
Section 27-40-420 requires every landlord to tell the tenant, in writing, the name and address of the owner or of a person authorized to act for the owner as agent, at or before the start of the tenancy. That is the disclosure that tells a tenant who to serve with process, who to send notices to, and who to hold accountable. When the property sells, subsection (b) makes clear that this duty does not evaporate at closing.
Two words in that sentence do the work. "Kept current" means the owner and agent information the tenant was given has to be updated when it changes, and a sale changes it. "Any successor landlord, owner, or manager" means the new owner is directly on the hook to provide it, whether or not the seller ever mentioned the obligation. A buyer who closes and then stays anonymous, collecting rent through a property manager the tenant has never been told about, is out of compliance with the statute from the first day of ownership.
For the buyer, the fix is simple and should happen immediately at or right after closing: give every tenant a written notice naming the new owner and the address and agent for notices and service of process. That single notice can also carry the deposit-transfer notification required by Section 27-40-450 and the instruction on where to pay rent going forward. For the current disclosure rules a landlord owes at the start of a tenancy, see our South Carolina lease requirements guide.
What each side should do at closing
Seller
- Transfer the full security deposit to the buyer at closing, in writing, and keep proof.
- Send the tenant written notice of the conveyance. Under Section 27-40-450 your release from future liability only reaches events after that notice.
- Confirm in writing that the deposit was transferred and notify the tenant a reasonable time after the sale, or you stay liable for the deposit under Section 27-40-410.
- Credit the buyer for any prepaid rent covering periods after closing.
- Hand over the signed lease, deposit records, ledgers, and any prior disclosures so the buyer can keep the tenant's information current.
Buyer
- You take the property subject to the existing lease. Read it before closing and plan around the remaining term.
- Get the deposit and prepaid rent transferred to you and reconciled at closing, not as a handshake.
- Send every tenant a written notice naming you as the new owner, your address and agent for notices, and where to pay rent, per Section 27-40-420(b).
- Once the deposit is transferred and the tenant is notified in writing, you are liable under Section 27-40-410 for its return, including the 30-day deadline and penalty. Track it.
- Honor the terms the tenant already agreed to. Changing them mid-lease requires the tenant's agreement or proper statutory notice.
The tenant's angle. If your rental sells, the deposit you paid does not disappear. Watch for a written notice of the sale and a written statement that your deposit was transferred to the new owner. Keep both. If you never receive written notice of the transfer, the original landlord can still be the one liable to you for the deposit under Section 27-40-450. Do not start paying rent to a new party on a verbal instruction alone. Ask for the new owner's name, address, and agent in writing, which Section 27-40-420(b) entitles you to, and get the change-of-payment instruction in writing before you redirect a single payment.
The statute at a glance
| Issue | Rule | Citation |
|---|---|---|
| Lease after a sale | Buyer takes subject to the existing tenancy; the sale is not a termination. General rule, assumed throughout the Act. | General rule; see Section 27-40-450(a) ("subject to a rental agreement") |
| Seller released from future liability | Good-faith sale to a bona fide purchaser, effective as to events after written notice of the conveyance to the tenant. | Section 27-40-450(a) |
| Security deposit | Seller stays liable for the deposit unless it is transferred to the buyer and the tenant is notified in writing a reasonable time after the sale. | Section 27-40-450(a), referencing 27-40-410 |
| Deposit liability shifts to buyer | Once transferred and tenant notified in writing, the purchaser is liable under the deposit-return statute. | Section 27-40-450(a), referencing 27-40-410 |
| Manager relieved of liability | As to events after written notice to the tenant of the termination of the manager's management. | Section 27-40-450 |
| Owner/agent disclosure | Must be kept current and is enforceable against any successor landlord, owner, or manager. | Section 27-40-420(b) |
Published September 2026. This guide is a reading of the South Carolina Residential Landlord and Tenant Act (S.C. Code Ann. Title 27, Chapter 40) and is not legal advice. Statutory text is drawn from the South Carolina Code of Laws, scstatehouse.gov. Confirm current requirements with an attorney or the South Carolina Department of Consumer Affairs.