Selling a tenant-occupied property is never easy, but perhaps now is the best time to do so. Challenges abound — it can be done, but only if everything goes perfectly.
The landlord-tenant relationship
Regardless of how stellar your communication has been to this point, the fact that you are trying to sell the home they currently live in will inevitably have an effect. They’ve been living there, minding their own business, paying their rent, and not having their life interrupted by their landlord. You’re now asking them to make several changes to their everyday lifestyle. In most situations, this is within your legal rights to do, but it is imperative that you realize the differences (and some similarities) between selling your own home and selling a tenant-occupied property.
The concerns most tenants have
With few if any exceptions, a lease is a legal document designed to protect both parties — the landlord is promised to be paid for providing the place to live, and the tenant is guaranteed to have the legal right to live there until the end of the agreement. Nonetheless, many tenants often worry that they’ll be “kicked out of their place” during the lease, even if they don’t mention it to you.
As a landlord, you always have to be honest and upfront in your dealings with your tenant — therefore, I recommend you notify them of your plans to sell as soon as you know for sure and remind them of their rights as tenants and your rights as the landlord/seller.
What you can and can’t do
Legal responsibilities may vary slightly from city to city, but most are pretty similar. The City of Chicago (per it’s Chicago Landlord-Tenant Ordinance) requires 48 hours notice be given to tenants in order to enter their leased premises. Less time is also possible if the tenant grants access.
You can ask the tenant to clean the place, take out the trash and make their bed. If they’re packrats, you can also ask them to declutter the home. Just know that they’re under no legal requirement to do so.
I’m not an attorney, but I have never seen a situation where you can tell them that you’re breaking the lease to sell the place. Telling them that you’ll be showing it outside established timeframes is off the list too, as is telling them that they need to change their décor or depersonalize the home. It’s still their home until the end of the lease.
Offer some possible incentives
One possibility is to offer the tenant something in return for voluntarily ending the lease early and/or keeping the place spotless. This would have to be by mutual agreement of course, but some may find a reduction in rent or other financial considerations highly motivating.
Your still a seller — everything still applies
One of the biggest challenges in selling a tenant-occupied property is that all the same “Must-Do’s” still apply. Remember, the potential buyers don’t care if a home is owner or tenant occupied, vacant, etc. — they just want to see homes.
Don’t forget — it’s just human nature
You may strike gold and have the perfect tenant — immaculate, never home, agreeable and flexible. Perhaps that’s been the case during their normal tenancy, but even the best of relationships can get strained when selling enters the picture. As caring or congenial a tenant may be, it’s not the home that they own, so they naturally are just not going to care as much as you do about every aspect of getting the home sold. Don’t bemoan that fact, just realize it and make it part of your decision to sell or not sell while a tenant occupies the space.
Final word: Selling a tenant-occupied property
Selling in this situation is never ideal — either for the landlord or the tenant. The way to give yourself the best chance for a positive outcome is communicating often, thanking them for being quality tenants and helping you through this process, and not being demanding. Remember, you get more flies with honey than you do with vinegar.