Can You Evict a Tenant to Sell Your House?

funny eviction on tenant

Having a tenant living in the house you are trying to sell can add a few hurdles to what is already a complicated process. While the most suitable option would be to evict a tenant from the property you intend to sell, it isn’t the legal way to go.

Alternatively, you can list the house on the real estate market with the tenant living in it; however, that can whittle down the pool of prospective buyers. Nevertheless, some buyers might see having a tenant as a benefit.

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Selling the House with the Tenant in It

When most people ask if they can evict a tenant to sell their house, they also wonder if they can sell the house with the tenant still living in it. The simple answer is, yes, you can sell your house even with a tenant still residing in it.

Most states have laws that grant rights for a tenant to remain in a property even after a sale is completed till the rental agreement or lease elapses. Nevertheless, just because it is possible to sell your house with a tenant doesn’t mean you should.

Before you place your house on the real estate market, you need to consider the advantages and disadvantages of selling your house with a tenant. In certain situations, having the tenant continue their lease during and after the transaction might work out. 

However, it is difficult to assess if that will be your case. The most effective way is to consider the advantages and disadvantages of selling your house with a tenant.

tenant key chain

What to Do if Having a Tenant Hampers Your Ability to Sell

Before analyzing the advantages and the disadvantages, it is important to understand how having a tenant can affect your efforts to sell your house.

For example, if the tenant is on a month-to-month lease, then all you have to do is end the tenancy by providing the stipulated time required by the law. In Denver, Colorado, the notice period is 21 days. To reconfirm, check that the law considers selling the house a valid reason for terminating the tenancy.

Conversely, terminating the tenancy won’t be easy if the tenant has a long-term lease. The most effective method would be to negotiate with the tenant. Sometimes offering money in exchange for nullifying the tenancy agreement can be the move to make. If the tenant agrees, you can have the tenant move out in time to deep clean and stage the house. Alternatively, you could choose to advertise the house as vacant upon closing.

You should note that trying to negotiate an early move-out can prove risky. Should the tenant decide not to follow through on the renegotiated terms, thereby remaining in the property beyond closing, then the new owner is placed in a situation where they have no choice but to evict the tenant. In turn, you could be liable for all the costs incurred during the eviction process.

If the timing is perfect, or you cannot come to an agreement with the tenant, you might need to wait until the lease is terminated before putting the house up for sale. Ensure that the tenant is notified in time (specified on the lease) if you intend to sell and not renew the lease.

Advantages and Disadvantages of Selling a Tenant-Occupied House

The State of Tenancy and the Tenant

The personality trait of your tenant comes into play when trying to sell your house. If you have a tenant that doesn’t keep on top of their housekeeping duties, is difficult to work with in terms of trying to sell your house, or isn’t responsive to communication, they could hamper your efforts to sell the house.

Conversely, if the tenant is clean, neat, constantly responds to communication like showing requests, and is willing to be an asset in the sale, you have another feature that can prove enticing for prospective buyers.

You should also consider the financial aspect, as a tenant that owes rent or pays below market value is likely to be a hindrance to the sale rather than an asset as very few prospective buyers want to deal with that.

The Pool of Prospective Buyers

Most real estate investors don’t mind buying a property with an already-existing tenant in it, so long as the tenant is up to date on their rent and has a rental agreement or lease in place. If the lease expires after the sale is closed or if the agreement is a month to month, your house could also appeal to buyers looking to live in the property themselves but cannot do so immediately.

Nevertheless, if your house is a single-family home with a tenant, it will not appeal to those looking to move in immediately. This feature can also reduce the pool of prospective buyers.

The Tenancy Terms

If you run a month-to-month tenancy, then all you have to do to end the tenancy is to give the legally-mandated amount of notice. You will also need to speak with a real estate to find out if it is best to leave the decision of keeping the month-to-month tenant to the buyer or simply terminating the tenancy before the sale closes.

If the tenant has a lease, then you might want to factor in how much time is left on the term. While a long-term tenant can be attractive to real estate investors, they might also turn off primary residence buyers looking to live in the property.

What to Consider When Trying to Sell Your House With a Tenant

If the tenant intends to stay on after the sale is closed and your property’s layout and size are attractive, you could choose to market it to both property investment and primary residence buyers.

The right buyer will select their intended use. Some cash home buyer don’t mind buying a primary home with a tenant since they don’t plan to move in for one reason or the other immediately. They may even choose to become the new landlord for the tenant occupied property.

Nevertheless, there are certain things you can do to ensure the sale goes smoothly when your house has a tenant. If the plan is for the tenant to move out of the rental property after the sale is closed, it is important to note that keeping a record of neatness and showing won’t be a priority of the existing tenant.

Ensure the Tenant’s Rent Is Paid on Time

Depending on the type of landlord you are, you might be lenient about your existing tenant being late on their rent. If the aim is for the tenant to stay on after the sale, then you need to ensure that the rent is paid up. While there may be a potential buyer searching for a house with tenants, no one wants a delinquent tenant.

One way to solve this is to forgive delinquency in return for the tenant moving out. You can also consider legal services and/or the eviction process if the tenant cannot pay their rent.

While financial incentives can help move things along, you should never underestimate the kindness of simply being considerate to the current tenant. Respecting the fact that it is still their home and they have tenants rights can go a long way in ensuring the sale goes as planned. An unhappy or uncooperative tenant can decide to stop cleaning or prevent showings, breaking the sale of a tenanted property.

Ensure the House Remains in Good Condition

You can help the client keep the house in great condition by offering to hire a yard or cleaning service the moment you decide to sell the house. Since your tenant doesn’t have any stake in the house and might be even moving out during that period, you, as the seller, will need to be responsible for ensuring the house remains show-worthy.

Request That the Tenant Leaves the Property During Showings

The last thing any buyer wants is to be followed around while viewing the house by a tenant, particularly if the tenant isn’t too pleased about having to move. Any prospective buyers should feel free to view the property.

You Can Help by Making Showing Times Easy for the Tenant

If you have an agent marketing the house or rental property, you should instruct them to give the tenant at least 24 hours written notice for any showing. Alternatively, you can check to see if the lease agreement specifies the amount of time.

You should also let the agent understand there will be times when they cannot show the property to a prospective buyer due to the tenant’s schedule. Just because you are selling the house doesn’t mean you need to completely disregard the fact that someone does indeed live there.

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