Selling a house with tenants in it is a delicate situation. A lot of landlords find themselves in a position where they can’t stand being landlords anymore, or experience a change that requires them to sell their properties quickly. When tenants are still involved, the process is a little more difficult to navigate. While there are obstacles, it’s not necessarily impossible.
Selling a property with tenants living in it requires a lot of special considerations about the lease, the law, and the timeline you can reasonably expect. The more you know ahead of time, the easier things will be.
Can You Sell a House When People Are Renting It?
The answer is both yes and no. It depends on the circumstances surrounding the sale.
Start by looking at the lease. The tenants, as long as they’re abiding by the terms of the lease, can continue to live in the house until the lease is up. You don’t have to renew it once the date rolls around – just make sure the tenants know that you don’t plan to, and tell them why.
You might be able to find a buyer who wants both the house and the lease. You’ll pass on security deposits and other money you’ve collected from the tenant to the new buyer. The person purchasing the property needs to agree to uphold the lease in its entirety. They can’t come in and kick them out if the tenants have been behaving. Some buyers won’t mind – they’ll want the rental income from the property and they might even renew the lease with the tenants.
If you want to sell the house before the lease runs out and you don’t have a buyer who wants to keep the tenants, this is where things get tricky. You can come to a mutual agreement about terminating the lease without penalties if the tenants are open to the idea. If they aren’t, you need to let them stay the duration.
How Does the Law Work Regarding Selling Occupied Rentals?
As long as you’re following the lease or you have buyer who intends to follow that lease, it’s legal to sell an occupied rental. If you’re selling the rental because your tenants have been frustrating, you can easily determine whether or not the lease allows them to frustrate you. If they’re routinely violating the lease, you can formally evict them through the proper legal channels. You can only do this if you can prove lease violations – you can’t do it if you merely don’t get along with the tenants.
Related: Tenants’ Rights When Selling a Rental Property
Speaking With Your Tenants About The Sale of the Property
Your property is your tenants’ home. If you’re going to sell it, they need to be made aware. If you intend on making any repairs or renovations before the sale, it’s important to start the conversation early on. These repairs and renovations may intrude or disrupt the tenants, and they need fair warning about what’s going to transpire.
Part of selling the home is showing the home. This means you’re going to need to take people inside of the tenants’ home while they’re still living there. Appointments to show the home need to be scheduled with the tenant’s cooperation, as you aren’t allowed to invite yourself or others into their living space.
It helps to have an actual conversation about these showings either in person or by phone. No matter how you decide to converse with them about it, you’ll also want to have these arrangements in writing. Mailing a summary of agreed upon dates and times or delivering a typed copy to the tenant will help clear up any confusion.
Helping the Transition Process Move Smoothly
Put yourself in the shoes of your tenants. Imagine how they would feel having people come in to look at their home, knowing its about to be sold. It’s a stressful time and a huge change for them, especially if they aren’t the type of people who enjoy company.
It’s important to show gratitude, respect, and appreciation for your tenants during this process. Leaving small tokens of your appreciation will ensure the continued cooperation of the tenant while demonstrating that you fully understand the impact the process is having on them.
If you want to spend a few days doing repairs and showing the property, it might not be too far out of line to offer to put your tenants up in a hotel for a few days. They can maintain their privacy and live their lives free from the disturbance.
How Freedom Real Estate Solutions Can Help
The easiest way to sell an occupied rental is to sell it to someone who will buy it as it currently is, tenants and all. It doesn’t matter if the home needs repairs or there’s still a few months left on the lease. Freedom Real Estate Solutions will purchase your occupied rental right now. We’ll treat your tenants with dignity and respect, and we’ll assume the responsibility of fixing up the property. We require very little from you in order to relieve you of your landlord duties.
The Freedom Real Estate Solutions Process
We prepare cash offers for all of our sellers. It’s money we have available immediately, and it goes straight to you as soon as you accept our offer. It doesn’t cost you anything to work with us – we assume all of the monetary responsibility, and we’ll never ask you to spend money on the property. You won’t need to disrupt your tenants by staging the property of inviting people in to view the house.
We can purchase the home whenever you’re ready. If you want to sell it this week, we’re able to arrange that. If you want to wait until the lease is up, we can wait patiently. The choice is yours. We’ve created a process that’s safe and easy for everyone involved, so you won’t need to navigate a complicated labyrinth to sell your property and move on to your next venture.