Selling a tenant-occupied house can be a tricky endeavor. As a landlord, you’ll need to be extra mindful of your tenants’ rights and needs, as well as the legal requirements of the rental agreement and local laws.
You’ll need to consider the impact of any tenant relocation, the timeline of the sale, and the potential tax implications. This guide will give you the information you need to successfully navigate the process of selling a tenant-occupied house.
Understanding the Legalities of a Tenant-occupied House Sale
When you sell a tenant-occupied house, you’ll need to abide by the lease agreement and local laws. The lease agreement will govern what you can and cannot do with the property, as well as the rights of the tenants. If you violate the lease agreement, you could be held liable for any damages your tenants incur due to the violation.
Therefore, be sure to consult the lease agreement before taking any action. Consider consulting an attorney to ensure you understand your local laws, tenants’ rights, and what you’re obliged to do while selling a tenant-occupied house.
Preparing Your Tenants for the Sale
First, you’ll want to prepare your tenants for sale, giving them time to make plans, find new housing, and provide you with a smooth transition.
Here’s what you need to do:
Meet with your tenants
Before you meet with your tenants, create a document with all the pertinent information, such as the sale’s timeline and the lease’s details. Then, meet with your tenants to discuss the deal and answer any questions.
Ask your tenants to sign the document
After your meeting, ask your tenants to sign the papers. This process will put their agreement in writing, making it easier for everyone to know their obligations going forward.
Create a transition schedule
Create a transition schedule to help you stay on track and inform your tenants about what to expect.
Offer rental assistance
Offer rental assistance if you know your tenants are having trouble finding new housing.
Negotiating a Buyer’s Offer
You’ll need to receive a buyer’s offer to sell a tenant-occupied house. Try negotiating the terms of the offer, such as the down payment, price, and closing date. A company such as ours (Falcon Home Buyers) will give you a cash, as-is offer for your house, even with the tenant still inside.
After that, proceed to arrange the terms of the offer. Make sure not to wait too long to negotiate the terms of the offer since it could give the potential buyer time to change their mind.
If you’re using financing to sell your tenant-occupied house, you’ll want to ensure the terms are acceptable to the buyer. After negotiating the terms of the offer, present it to your tenants, which is an excellent time to clarify any details in the offer. Once you’ve shown the offer to your tenants, you’ll need to decide whether to accept or reject it.
Consulting an Attorney
Before you proceed with the sale of a tenant-occupied house, you should consult an attorney. They will be able to help you proceed with the sale legally, which is especially important if you’ve never sold a tenant-occupied house before.
Your lease agreement will outline your tenants’ rights. While you can read the lease agreement yourself, it’s a good idea to consult an attorney to ensure you abide by the contract. Some states have tenant relocation laws outlining how to proceed with relocation.
Handling Tenant Relocation
You’ll need to handle tenant relocation as you proceed with the house sale. Once you’ve found a buyer for the tenant-occupied home, communicate with your tenants to let them know they have a certain amount of time before they must move out.
If your tenants have difficulty finding new housing, you can help them by offering assistance. Try helping them find new housing or assist with their relocation costs.
If your tenant can’t pay rent, they’ll appreciate some cash to help move. However, if they don’t leave, don’t threaten, harass, or evict them without a court order. Don’t replace the locks or turn off the utilities while renters are under lease, and avoid penalties and lawsuits by following the rules.
Being polite and sympathetic towards the tenants would be beneficial, even if they make it challenging for you to sell your house. Giving them an honest explanation and a little inducement can help them accept your rules.
If you want to sell your tenant occupied home easily, without the hassle, make sure to contact us and see what we can offer you for your house.
This article is meant for informational purposes only. We always encourage you to consult with a professional advisor regarding your situation.