If you ever deal with commercial property in your career as a real estate agent, you are likely to come across a property owner looking to sell a building that already has tenants. Having tenants can be a selling point for a rental property since the new owner will start with passive income from rent and will not have to worry about finding occupants in the near future.
However, those tenants are in a delicate position, and it is important that you encourage your client to treat them with respect during the transaction, especially if the property for sale is a single family home rental. While your client might see the property as his or hers to sell, it is vital to keep in mind that the house is also home for the tenants. Aside from simple courtesy, the law also protects certain rights of renters during a property sale.
Respecting the tenants helps everyone
The cooperation of your client’s tenants could make or break the sale of the property. If your client neglects them or disrespects them during the process, you may find it difficult to seal the deal. After all, what incentive do poorly treated tenants have to help a landlord sell their home? Easing tenants through the process is not difficult if you keep in mind the following rights most renters have:
- To receive notice before you show the property to perspective buyers, usually 24 to 48 hours
- To have showings scheduled at reasonable times and convenient days
- To expect repairs and maintenance to continue without disturbing their peaceful existence
- To have the first refusal for purchasing the property before other buyers are considered
If potential buyers stipulate that the tenants must vacate, you are dealing with another set of issues. Your client must follow state law for giving the occupants notice to vacate, and some areas require landlords to pay a relocation fee in addition to offering a lease payout. However, if the tenants choose to remain to the end of their lease, that is their right. New owners will not be allowed to change the terms of the existing lease, such as refusing to allow pets.
In the long run, communication, respect, and monetary incentives are the universal motivators for obtaining the cooperation of tenants and improving the chances that, if necessary, they will leave on positive terms with the unit in good condition.