Yes, a Modesto rental can sell with tenants in place, and the Rental Housing Safety Program duties stay with the unit for the buyer.
The city audits up to 10 percent of rental units a year, charges $100 per unit inspected, and gives 30 days for repairs. Each deposit either moves to the buyer with notice to the tenant or goes back to the tenant.
This is general information, not legal advice. State rules vary.
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Has the city scheduled an RHSP inspection for your rental?
Free. No obligation. You choose the closing date.
The Modesto Rental Housing Safety Program (RHSP) sets the rules for every rental unit inside city limits, and those rules stay with the unit when you sell. On July 31, 2026, the City of Modesto posted the numbers behind the program. Inspectors looked at 2,554 properties in 2025 and found violations in 617 units.
This guide covers what the program asks of an owner, what an audit costs, and how a sale works with tenants in place. It quotes city pages and California statutes. It is general information, not legal advice.
What is the Modesto Rental Housing Safety Program?
The RHSP is a citywide registration and inspection program for rental housing, created when the Modesto City Council passed Ordinance 3703 in 2019. It requires owners to register each rental unit with the city.
The City's program page states its purpose: "to safeguard and preserve the housing stock of decent, safe and sanitary residential rental units." The Building Safety Division runs it.
Registration and self-certification
Registration is free. The program page answers the fee question in five words: "There is no registration fee." Owners also self-certify every year that they have inspected their units and that the units meet the required standards.
The city's registration page adds one rule that matters on a sale. "Owners are required to update their registration whenever there is a change of ownership or contact information."
Late registration and the local contact
The city may mail an owner a registration notice. The owner then has 30 days from the date of the notice to register online or by mail. The City of Modesto's July 31, 2026 news item says registering late "may result in penalties ranging from $100 to $1,000 per property, depending on how late the submission is."
Each registration names a local contact representative. The program's FAQ defines that person as the owner, or a representative or property manager with "full authority to act on behalf of the property owner." The contact must be local so the city can serve notices in person if needed.
What happens in an RHSP audit inspection?
The city audits up to 10 percent of rental units each year, with at least two weeks' notice by mail and a $100 fee per unit inspected. Any item found must be repaired within 30 days.
The owner does not book the inspection. The city picks the units. The news item says it may select "properties owned by frequent Health and Safety Code violators." It may also choose properties at random in certain census tracts. The owner, the tenant, or the local contact must be present.
"If an issue is found with the unit, property owners must make repairs within 30 days following the inspection and submit proof of correction."
City of Modesto, news item posted July 31, 2026
Fees, fixes, and the two-year exemption
- Inspection fee: $100 per unit, invoiced after the inspection. A unit does not pass until the fee is paid.
- Fixes on the spot: Repairs made during the inspection count. If every item is fixed and the fees are paid, the unit passes.
- Proof of correction: For repairs made within 30 days of the baseline inspection, an owner can file the city's Proof of Correction form online, at no charge.
- Citations: The city's 2025 annual report lists $100 per violation at first, then $250, up to a maximum of $500 per violation for items left uncorrected.
- A pass buys time: "Units that pass may be exempt from another city inspection for two years."
The program's 2025 numbers
In 2025 the program inspected 2,554 properties and found violations in 617 units. Staff brought 87 percent of the violating units into compliance (City of Modesto, July 2026).
| RHSP measure, 2025 | Figure |
|---|---|
| Registered rental units | 20,086 |
| Estimated rental units citywide | 35,000 (about 15,000 unregistered) |
| Properties inspected | 2,554 |
| Units with violations | 617 |
| Electrical deficiency cases | 224 |
| Water heating cases | 106 |
| Smoke detector cases | 105 |
| Inspection fees collected | $80,100 |
| Citation fee revenue | $38,700 |
Source: 2025 annual report, City of Modesto RHSP.
The top findings are ordinary repair items: wiring, a water heater, a smoke detector. Much of Modesto's housing is decades old. The city's 2023-2031 Housing Element reports that "57 percent of units were built before 1980."
Is your rental inside city limits?
The RHSP covers rental units within the City of Modesto, so the first question is whether the parcel sits inside city limits. Some addresses with a Modesto mailing address do not.
The Housing Element puts it plainly: "The southern area of Modesto includes a number of unincorporated islands and pockets. These areas are not in the City of Modesto."
Can you sell rental property in Modesto with tenants in place?
Yes. A Modesto rental can sell with the tenants living there, and the buyer becomes their landlord on the existing leases.
California's Tenant Protection Act lists the just causes for ending a covered tenancy, and a sale of the house is not one of them. The law applies "after a tenant has continuously and lawfully occupied a residential real property for 12 months" (Cal. Civ. Code § 1946.2(a)). Its definition of "owner" includes "a predecessor in interest to the owner" (§ 1946.2(k)(1)), so the buyer steps into your history with the tenant.
The rent cap carries over too
Covered rents can rise no more than "5 percent plus the percentage change in the cost of living, or 10 percent, whichever is lower" over any 12-month period (Cal. Civ. Code § 1947.12(a)(1)). The base is the lowest rent charged in the prior 12 months. The rent cap uses the same predecessor-in-interest definition of owner (§ 1947.12(g)(2)).
Some single-family houses and condos are exempt from both statutes. The owner cannot be a real estate investment trust, a corporation, or an LLC with a corporate member. The tenant must also have received the exact written notice the statute prints (§ 1946.2(e)(8)). Whether an exemption fits a particular unit is a question for a California landlord-tenant attorney.
Tenant-occupied versus vacant
A house with tenants appeals mostly to buyers who want a rental. For context, Redfin's Modesto median sale price was $464,779 for the three months ending September 2026, with a median of 24 days on market (Redfin, September 2026). Zillow's typical house value for Modesto was $439,988 (Zillow ZHVI, September 2026). The Modesto housing market guide breaks those figures down further.
What passes to the buyer and what the seller settles
The leases, the tenants, the rent history, and the RHSP duties stay with the unit and pass to the buyer. Invoices and deposit paperwork from your ownership are yours to close out.
| Item | Passes to the buyer | Seller settles or delivers |
|---|---|---|
| Leases and tenants | Yes, same tenants and terms | Copies of leases and rent records |
| Just cause and rent cap history | Yes, "owner" includes a predecessor in interest (§§ 1946.2(k)(1), 1947.12(g)(2)) | Nothing to settle |
| Security deposits | If transferred, with notice to the tenant (§ 1950.5(i)(1)) | A written deposit statement to the buyer (§ 1950.5(j)), or a refund with an accounting |
| RHSP registration | The unit stays registered; the record is updated for the change of ownership | Any late registration penalty already charged ($100 to $1,000 per property) |
| Open repair items | The unit's condition, as-is | Who finishes a 30-day correction is a term of the purchase contract |
| Inspection fees and citations | Not by default | "The fees are the responsibility of the property owner"; who pays an open invoice is a term of the purchase contract |
Sources: Cal. Civ. Code §§ 1946.2, 1947.12, and 1950.5; City of Modesto RHSP program page, registration page, and July 31, 2026 news item.
Security deposits on a sale
When a landlord's interest ends by sale, California gives the seller two choices for each deposit: transfer it to the buyer or return it to the tenant. Either one ends the seller's liability for that deposit.
The rule sits in Cal. Civ. Code § 1950.5(i). A transfer covers the deposit "remaining after any lawful deductions." The seller then notifies the tenant by personal delivery or first-class mail, with the buyer's name, address, and telephone number.
Before a voluntary transfer, the seller gives the buyer a written statement under § 1950.5(j). It lists the deposit remaining, any deductions, and which of the two choices was made. If a seller skips the transfer rules, the buyer can be "jointly and severally liable with the landlord" for the deposit (§ 1950.5(k)(1)). Buyers ask for this paper early for that reason.
Selling with an open audit or repair item
Nothing on the city's program pages says an open audit or repair item blocks a sale. It stays with the unit, so the buyer and seller decide who finishes it, and the closing follows the city's step.
A few documents tend to make that conversation short:
- The audit notice and the inspection report, if one exists.
- Any Proof of Correction already filed.
- Paid or open invoices for the $100 per unit fee.
- The current registration and the latest self-certification.
A buyer can also check a unit's status. The program FAQ says anyone can "Call 209-577-5232 to request a certificate of compliance for a unit." Selling as-is means the buyer takes the house in its current condition, open items included.
If the rental came to you through an estate, the probate steps come first. The guide to selling an inherited house in Modesto covers that path. The tired landlord page covers selling a rental more broadly.
How can Propcash help with a Modesto rental?
Propcash is a direct cash homebuyer, and we buy houses with tenants in place. No eviction is needed before you sell.
You can sell as-is, with no repairs. We'll make you one cash offer based on local market data and show you how we got to our number. Sellers pay no fees and no commissions, and you pick the closing date.
If an audit or a 30-day correction is open, the closing follows that step. If listing the house would serve you better, we will tell you. You can get a cash offer on your Modesto rental and compare it with your other options. The Modesto, CA cash offer page shows how we buy across the city. There is no obligation.
Frequently Asked Questions
Is there a fee to register a rental with the City of Modesto?
No. The City of Modesto says there is no registration fee for the Rental Housing Safety Program. The costs come later: a $100 per unit fee after an audit inspection, and late registration penalties of $100 to $1,000 per property, depending on how late the submission is.
How much notice does Modesto give before a rental safety inspection?
The Building Safety Division notifies the owner by mail at least two weeks before the scheduled inspection. The owner does not schedule it. The owner, the tenant, or the listed local contact representative must be present when the inspector arrives.
Does a pending RHSP audit stop me from selling my Modesto rental?
Nothing on the City of Modesto's program pages says a pending audit blocks a sale. The unit, the open items, and the registration duty all stay with the house, so a buyer will want to know where the audit stands. The closing follows whatever step the city has set, and the purchase contract can say who handles the repairs and fees.
Do my tenants have to move out before I sell a rental in Modesto?
No. A Modesto rental can sell with the tenants in place, and the buyer takes over as their landlord. California's Tenant Protection Act does not list a sale of the house as a just cause to end a covered tenancy, and its definition of owner includes a predecessor in interest (Cal. Civ. Code section 1946.2).
Who keeps the security deposit when a Modesto rental is sold?
Under Cal. Civ. Code section 1950.5(i), the selling landlord either transfers the remaining deposit to the buyer and notifies the tenant, or returns it to the tenant with an accounting. Before a voluntary transfer, the seller also gives the buyer a written statement of the deposit, any deductions, and which choice was made.
Does the Rental Housing Safety Program apply in the unincorporated islands around Modesto?
The city describes the program as covering residential rental units within the city of Modesto. The city's Housing Element says the unincorporated islands and pockets in southern Modesto are not in the City of Modesto. For a rental with a Modesto mailing address, the first step is to check whether the parcel sits inside city limits.
Reviewed by the Propcash Editorial Team under our editorial standards. Published by Propcash, a direct cash buyer of houses. This guide is general information. Laws, fees, and market figures change, so check the current rules for your state.
