August 28, 2017

sell with tenants

Some homes were meant to be rented – apartment buildings and multi-family homes for example. Having tenants in these types of properties is acceptable and even a positive asset when it is time to sell. However, the same is usually not true for single family homes. Most of the time single family homes are bought by people who would like to move into them as their residence, not rent them out. Selling these homes can be challenging.

If you are considering selling your home that is currently rented out you may want to keep a few things in mind:

Leases generally run with the land – not the owner. That means if you have a lease in place, the buyers of your property will be buying the tenants with the home. This will prevent anyone wanting to buy the home as their own residence from buying your property. Even if they do agree to buy and see out the existing lease, their lender may disagree as most financing products distinguish between an owner occupied home and an investment property. Selling a home with tenants in place greatly reduces your buyer pool and ultimately what those buyers are willing to pay.

Tenants, even those on a month to month lease, do not personally benefit in any way from showing the home they live in. 99% of the time tenants will make showings difficult or deny them altogether. Keeping the home in show shape also offers them no direct benefit, so don’t count on too much effort going into this. Tenants are inconvenienced by showings and having to move unexpectedly by having their home sold is simply not in their best interest.

Tenant occupied homes take longer to sell and sell for less, if at all.

If you wish to have your home sell quickly and for the most money – it is simply best to not have tenants present in the home. Timing your home sale after the tenants lease has ended and they have moved away is best. 

If that is not possible and you must sell anyway:

  • Negotiate a month to month lease with the tenants so the home can be vacated prior to closing should a buyer want to move into the home.
  • Have an open conversation with your tenants about your intentions to sell and how this will affect them –  before going on market. Set expectations for showings and for what condition the home should be in for showings.
  • Unless you have the world’s nicest tenants, they will likely still not be truly motivated to help you sell. If that is the case – Incentivize! Reduced rent or other financial incentives will probably work best here to get the tenants to cooperate with your efforts to sell the home – consider it a cost of sale. It will most certainly be cheaper than your first price reduction.
  • Give plenty of advance notice for showings. Yes – they likely have the legal responsibility to show the home with 24 hours written notice (depending on your lease), but once you must resort to forced showings, things have a tendency to go downhill. You can force them to show, but they may very well be present for the showing, or fail to keep the home in its best condition.
  • Tenants that are truly uncooperative to a point of violating the terms of their lease are best dealt with by an attorney.

It’s always easier when they’re on your side. For the best results try to understand your tenants position when “their home” is being sold and work to get their cooperation in advance.

ct selling with tenants

Last Updated on August 9, 2022 by Minna Reid

About the author 

Minna Reid

Minna Reid is The Broker - Owner of Reid Real Estate Group. Reid Real Estate Group is a full-service Connecticut residential real estate brokerage, specializing in helping homeowners with legal and financial challenges including short sales, probate sales and tax lien complications.

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  1. Hi there! If a tenant is on a month to month lease and the landlord is selling the home, how long does the tenant have to vacate? Is it 30 days after the closing?

  2. If the tenant has a lease with the former owners and the term of tenancy doesn’t end for another 4 months. Can I write a new lease with our names but not change the terms of the lease and then rewrite a new lease with our terms once it ends. Do we have to follow the former owners lease with the tenant now?

    1. If the tenant wants to enter into a new lease now, they certainly can. They don’t have to. If nothing is done, the terms of the original lease will continue to its end date.

  3. Thirteen years I have paid my rent.I am 67 and disabled.Landlord selling apt.bldg.Threatens eviction if I don’t let showing of apt.during covid.No repairs in 13 years.What are my rights?

    1. There is most likely a clause in your lease giving the landlord the right to show your home with notice. You do not have the right to prevent the landlord from selling, but your lease runs with the land, not the owner of the property. That means as long as you have a current lease it will stand through its end date, and a new owner cannot change its terms.

      1. I just signed (another) 3 year lease with my landlord (I've sign two previous 3-year leases with him). He just informed me he wants to sell the house. There's no clause in my lease at all as far as selling the property and what either of our rights are. The only this it says regarding sale of the house is that if he sells, he has "the right to transfer tenant's security deposit to the new owner or assignee to hold under this lease…" What is the law? Does my lease carry over to the new owner? Is he legally allowed to sell to someone that won't honor the lease? Am I safe from having to worry about moving?

  4. My landlord sold the duplex that I live in I have a federal section 8 and have lived here eight years he read he put it for sale February 2nd and sold it on February 16th he’s giving me 60 days to move and I cannot find an apartment what rights do I have

    1. If you have a current lease and are not in violation of it, it stands and he cannot force you to leave earlier. If you do not have a lease, you have a month to month tenancy and yes he can end it at any time with at least 30 days notice.

  5. Hello lived in duplex 5 years did not renew lease last year pay month to month Landlord selling place I’ve spent lots of money on beautiful flowers shrubs etc I’m planning to dig them up and take them when I go there were no flower gardens here when I moved in Landlord told me I could plant anything I wanted No maintenance in 5 years unless I complained Can landlord stop me from taking my plants? Had started repainting inside with permission not painting now can landlord keep my deposit if I don’t paint? Wasn’t painted or cleaned for me to move in thank you!

    1. Your lease would spell that out. However most leases will require that a tenant allow access with 24 hour notice. Unfortunately there is no entity that will enforce this as police will not get involved in civil matters. So you really have no recourse if the tenant refuses, except to attempt to evict them for lease violations.

  6. My landlord decided to tell me that he is selling the 2 family home. He placed it on the market less than a week from telling us on paper. He then stated that he was selling it with tenants occupied. Problem is on the website it says tenants are month to month but i have a yearly lease especially with housing just like the other tenant.
    His shiwings are ridiculous and is making alot of things complicated. I have 2 children with disabilities and my spouse is a stay at home dad. My landlord and his inconsiderate realtor keeps scheduling showings early in the morning which I do not like waking up my kids to early especially my 2yr old with autism. I spent 2hours trying to comfort a screaming child because he wanted to sleep. I told my landlord that he needs to respect my rights. He gave me a 24 hrs for 2 showings but now he keeps adding more showings in the 2 days that he gave me and now its interfering my children’s routine & my family dinner and bedtime routine.

    What can i do?

    1. The landlord has the right to sell the property and the right to show it with notice. I would discuss preferred showing time frames with the owner and agent, however there is nothing you can do to stop him from showing and selling. If you have a current lease it will be good through its end date regardless of whether the home sells or not. If you wish to remain longer than the lease allows, your best bet is to be a good tenant that the next owner would like to keep.

  7. I am currently renting and my landlord is looking to sell I have read that before showings I am to be provided 24 hour notice is that true also would I have to move out upon sale.

    1. Leases run with the land not the owner. You need to read your lease for the details, but if you have a current lease it will be good through its end date. If you do not have a lease, generally your landlord can end your tenancy for any reason with 30 days notice. Most leases allow a 24 hour notice to allow showings.

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