You are interested in selling your property but it is occupied by tenants. Below are some clear steps to follow when looking to sell a tenant-occupied property.
If you are a landlord that is planning to sell the property, the more convenient way to go about it would be having a frank discussion with the tenant and finding a mutually beneficial solution. However, in many cases, conflicts could arise when you are looking up the best options on how to sell property with tenants.
From your perspective, you want to sell the home with maximum profit and that can only happen when you show the property to several interested buyers. Tenants do not want their privacy to be interfered upon, and without a shared understanding, they may be hostile to visitors on the property. There are many instances when a sale does not happen due to unhappy tenants chasing away potential buyers, and sellers being too choosy about the offers they receive.
Wondering what the process is to sell house with tenants and how to begin?
Start by Preparing the Tenants First
Schedule a meeting with your tenants and have an open discussion about what is expected from them, once you have decided to sell house with tenants. Refer the tenants to the Landlord & Tenant Board (LTB) website where they can see what their rights are, and the requirements if a landlord is requesting access to the property during tenancy. Reducing the impact of the disturbance to daily lives will significantly make them more cooperative and helpful through the sale process.
Inform the tenant about home inspection
Send an early notice to the tenants regarding when a home inspection will take place on the property. This can include a reminder to keep valuables in a safe place while showings take place. Let them know the approximate time, which could range from two hours to more based on how big the building is. In case other professionals are scheduled to assess the home, such as contractors and insurance agents, keep the tenants in the know as you sell house with tenants.
Plan out the showing schedule
To minimize the upheaval in their normal routine, you can actively work with the tenants to decide on particular days and times in the week that would be best for both parties. For instance, it could be on two days of the week, Tuesday and Thursday, from 5 pm to 8 pm. In case there are multiple tenants on a single property, you can choose to show a single unit until a clear offer comes through.
Discuss other options with the tenant
While this is something often overlooked, see if the tenants would be interested in purchasing the property if your intent is to sell. Sometimes it they may surprise you with an positive response. If tenants are receptive to making an offer, remember this will result in considerable savings on your end in terms of time and money. Another point is to always ask questions to the tenant prior to any showings, because who better to give information about the property than those currently living in it.
How do you deal with tenants when you sell a house in Ontario?
Know the rights of landlords and tenants
As you embark on the long process to sell house with tenants, it is important to know the rules of the game under the Residential Tenancies Act, not only for your own advantage but for better business. When it comes to aspects like vacant possession and going into a tenant’s unit during occupancy, these are tricky situations that need to be done in line with legal provisions.
Eviction is not possible during a lease
If the tenant still has a lease, you cannot evict them in order to fast-track the sale process until the term ends. In case the lease isn’t valid, the tenant will be staying on a month-to-month rental basis. To sell rental house, a tenant must be given at least 60 days to vacate the property once an agreement is drawn up for the sale and the buyer is confirmed.
It is important to note here, that the landlord cannot trick a tenant into vacating the property under false pretences. For instance, the landlord claims they will move into the property and once the tenant has left, goes ahead with selling the home. The tenant would be within their right to sue in this situation. The Ontario Landlord and Tenant Board might charge a heavy fine to the landlord as well.
24 hours’ notice for a showing
As per the rights, when a landlord gives 24 hours’ notice to the tenant in advance, he or she is obligated to make the property available for a showing to any interested buyers. The time slots for the showing should be between 8 am and 8 pm to sell house with tenants. The tenant cannot make any requests that the property is shown only when they are present. If they refuse to cooperate after the landlord’s prior and proper notice, this becomes a violation of the agreement between both parties. The landlord is then within their right to evict the client or sue for damages.
Once the property has been sold off
When the sale is final, the property ownership transfers to the new owner and the tenancy will continue under the same terms as before. While a new rental agreement isn’t required, if both buyer and tenant want to, they may sign one. In case the landlord intends to occupy the unit or repurpose it, the tenant must be given advance notice to end the tenancy in good faith.
If the tenant has any issues, they may dispute this within 15 days. In case there is no dispute, the tenant is obliged to move out by the specified date in the notice. The landlord is within his right to dispute resolution to request possession of the unit once the dispute period has passed, when the tenant does not cooperate.