Real estate prices are currently the highest they’ve been in a long time (if not ever). This has motivated many property owners to decide that it’s high time to sell their rental units.
As a landlord, you likely know when you can lawfully evict a tenant. That insight doesn’t really aid you in determining what your rights or responsibilities are if you want to sell your rental, though. You have a few different options that you can pursue.
If you plan to sell to an owner-occupant
There’s a strong potential that the person who wants to purchase your rental may also want to reside in it. You generally can’t evict a long-term tenant simply because someone wants to purchase your unit. Selling your home doesn’t change the terms of someone’s lease.
Your first step to knowing what your options are might be to review your rental agreement. It should spell out the terms and conditions under which you can terminate this lease. You may find that you have to give them a certain amount of notice, compensate them for breaking the contract or additional limiting terms and conditions.
When you plan to sell your rental to a fellow landlord
While the prospect of taking ownership of a rental that already has tenants may appeal to you, another landlord may not feel the same.
Many landlords like the idea of purchasing vacant rentals because it allows them to negotiate their own lease terms (including rent). It also allows them to make improvements to the property before tenants move in. They see this as minimizing their liability risk.
If your prospective buyer is looking to buy a vacant unit, then you may determine that it’s best to wait for the lease to expire with your current tenant before closing on the sale of your rental.
Making sense of contracts, such as rental agreements, isn’t always easy to do. You must interpret the contract correctly and understand the applicable laws surrounding what you’re planning to do unless you want to avoid exposing yourself to legal liability.