When selling a rental property, it’s important to understand your rights and those of your tenants. Although the home may be yours, your renter’s rights are protected under certain laws, even if you decide to sell. Any violation of your lease agreement with your tenant could put a wrench in the process of selling your rental property. Read on for some helpful tips on navigating the laws surrounding selling a property currently occupied by a renter.
Do you have an active lease with your tenant or are they on a month-to-month basis? Even if their lease is up, you will need to notify them that you intended to sell the home they’re currently occupying. Different cities have different requirement for the timeframe in which you must announce your intent to sell, but generally, landlords are required to notify tenants at least 30-60 before they will need to vacate the property. If you fail to give them proper notice, then they are not technically obliged to move out when you want them to. That could create a lot of trouble for you and the buyers of your property.
If your tenant still has an active lease, that may affect your ability to sell your rental property. If you’ve built-in some type of early termination clause in your lease that allows you to ask them to vacate before their term is up under certain situations, you may be able to give them notice right away. However, if you don’t have such a clause in your lease, your tenant has the right to remain on the property as long as they are in good standing according to their rental agreement.
In some cases, you may be able to transfer your lease to the new buyers of your home. Of course, this will depend on your ability to find a buyer that is interested in purchasing a tenant-occupied home. That isn’t completely out of the realm of possibilities. On the contrary, there are many investors out there looking to buy property specifically for the purposes of renting it out. Having a good tenant in place already may actually be an attractive selling point. In the event that the buyer of your home does agree to complete their purchase with the tenant still living in the home, they will be required to honor the lease that is already in place.
If you really want to see your home, however, your tenant still has time on their lease and you’re having trouble finding a buyer who is interested in an occupied property, you can always approach your tenant about possible purchasing your home. If you go this route, make sure that you’re prepared to return any security deposits that you’ve held from the renters.
If you need legal assistance with your tenants or the sale of your rental property, contact the real-estate law experts at Derryberry & Associates. We help landlords just like you every day with a wide range of legal matters that may arise between you and your tenants.