Tread carefully when selling a house with a tenant

Putting your house on the market can be trying at the best of times, but stress levels step up a notch when the property you’re selling is occupied by a tenant.

In my experience, you can predict how rocky or smooth a sale involving a leased home will be based on the quality of the existing relationship between the tenant and the owner.

To the extent that it’s possible, feeling like you’re in it together will minimize the chances of things getting messy.

Still, few tenants will be thrilled with the prospect of new landlords – whether in the same place or in a new home – so it’s always going to be a delicate affair. Just try to remember that it’s a stressful time for them too, because cooperation and compromise are going to hold the keys to success; open, respectful and friendly communications are a must. 

Each landlord-tenant relationship is unique, so it’s best to get a lawyer involved early in the  process, in order to get a full view of your legal options before making any big decisions.  

Sometimes your routes forward may be limited by the terms of the lease: if it’s for a fixed term or they have a renewal option, then your tenant has the right to stay until its expiry, and you won’t be able to close the sale before that date, unless the new owner is prepared to take over the tenancy.  

Some tenants in this scenario may be open to negotiation for an early lease termination, but you may also find incentives are just as useful in cases where your tenant is renting on a rolling monthly basis. 

These gestures could range from token (gift cards or a bottle of wine) to substantial (rent reductions or cash payments), but they will pay themselves back if they help deliver the certainty that comes with a willingly departing renter.

In all cases, tenants are entitled to proper notice as the process goes on. Notice to end a tenancy because a buyer wants to move in must be delivered at least 60 days in advance, while renters need at least 24 hours warning of any showing. 

Disclaimer: The content on this web site is provided for general information purposes only and does not constitute legal or other professional advice or an opinion of any kind. Users of this  website are advised to seek specific legal advice by contacting members of Laredo Law (or  their own legal counsel) regarding any specific legal issues.