When a land lords sells to an owner occupiers does it push up rents?
Your argument is sound (as a first approximation). In fact this is one of the basic examples discussed in chapter 1 of Varian's Intermediate Microeconomics (a standard textbook). 


  Suppose that a developer decides to turn several of the apartments
  into condominiums. What will happen to the price of the remaining
  apartments? Your first guess is probably that the price of apartments
  will go up, since the supply has been reduced. But this isn’t
  necessarily right. It is true that the supply of apartments to rent
  has been reduced. But the demand for apartments has been reduced as
  well, since some of the people who were renting apartments may decide
  to purchase the new condominiums.


(quote from pg 10 of the 8th edition) 

If you make some additional assumptions e.g., that all buyers are former tenants and that there is no friction in the market (rent changes may be larger when there are new tenants to avoid tension), the equilibrium price will be the same.