What Happens to My Tenants?

In a 721 exchange, your tenants stay in their homes. Flock Homes honors the existing lease and works with the resident to renew it when it ends.

For a lot of landlords, this is the real worry. You may have a tenant who has paid on time for years, and you don't want to put them through a mess. That's a fair concern, and the short answer is reassuring. Here's what to expect during a 721 exchange.

Does the lease carry over?

Yes. Occupied or vacant, Flock Homes accepts both. Tenanted homes are the norm: 84% of the contributed homes in Flock's Fund today came in with a tenant already in place (as of October 1, 2026). When a tenant is in place, the lease stays in place. Existing leases are assigned to the Fund at closing, and the rent, term, and other lease terms stay the same through to the end date.

Nobody is asked to move out because ownership changed. When the lease is close to expiring, Flock Homes works with the resident to renew.

Who manages the property after closing?

Flock Homes does. Title transfers to Flock's Fund (Flock Homes OP LP), and Flock Homes is the General Partner. The property is managed by a local team in each market, working with in-house and third-party property managers that Flock Homes actively manages.

The property continues to be operated as a long-term rental. That matters to tenants, because it means a stable home rather than short-term turnover.

What will my tenant notice?

Mostly, a new point of contact. Day to day, a good tenant should see the same house and the same lease, but who they call and where rent goes will change.

You'll need to notify your residents of the sale, and Flock Homes also sends its own notice letter before the transition with everything they need to know. Starting the month ownership transfers, rent goes to the new property manager, and residents get an invite to a resident portal (AppFolio) where they can pay rent and submit maintenance requests.

After closing, Flock Homes may also make value-add renovations, repairs, and maintenance on the property. In an occupied home, that work is scheduled with the resident through the property manager.

What about the security deposit?

Your residents won't need to pay a new deposit. Their existing security deposit is transferred at closing to the new property manager and carries over as-is, so there's nothing for them to do. Your closing documents will spell out exactly how it's handled.

What happens to my current property manager?

If you work with a property manager today, you'll end that agreement yourself, so check its notice period and any fees before you start. Flock Homes' internal team takes over management at closing. Our guide to hiring a property manager explains what to look for in these agreements.

What should I do before I contribute a tenanted property?

A few simple steps will make this go smoothly.

• Gather your leases, rent roll, and deposit records in one place.
• Tell us about anything unusual, like a tenant behind on rent, a lease nearing its end, or open repair requests.
• Give your tenants a friendly heads-up that a change is coming once you have a plan. Flock Homes sends the formal notice letter, so a short personal note is plenty.

If you'd like to compare this with selling a tenanted home on the open market, see our 7 options when selling a home with tenants. There's no need to rush, and if a tenanted property isn't a good fit, we'll tell you honestly. Flock Homes only accepts properties that meet its financial return requirements, and lower mortgage balances, generally under 30% of value, are more likely to be accepted.

Ready to see if your rentals fit?

Submit your rental address for a free valuation. It's free, with no obligation, and you can tell us about your tenants when you do. More questions? The FAQ covers a lot.