Answer: Carolyn Parrella, Executive Manager, Terri Scheer Insurance
Putting a rental property on the market can be a disruptive time for tenants. Open inspections, potential buyers driving by the property and regular contact from the selling agent to arrange further inspections are all things which can significantly interrupt your tenant’s daily routines.
Keeping a good tenant happy is one of the best investments a landlord can make.
The following tips can help landlords make the sale process easier for tenants:
Maintain a positive relationship with your tenant
Maintaining a positive relationship with your tenant can help to ensure that they remain cooperative throughout the sale process. This can also contribute to a smooth and hassle-free sale and reduce the likelihood of the tenant causing malicious damage to the property if they feel as though they have been mistreated. Tenants who respect the landlord and the property are likely to ensure it is well maintained and tidy for open inspections, which can help to attract possible buyers. A tenanted property that is well looked after can also be an attractive proposition for potential investors. If they are the successful buyers, they may look to keep the tenants.
Check your lease agreement
If you’re looking to sell your rental property, your tenant’s lease should be a priority. How you manage the sale process and what you can request from the tenant depends on the lease agreement that was signed by you and the tenant at the start of the tenancy. If the tenant is on a fixed term lease, you must allow them to remain in the property until the end date stated on the agreement. However, if you want them to vacate the property prior to this date, you can try to negotiate with them. If the tenant is on a periodic lease, your are entitled to end the agreement.
The termination notice period and requirements vary from state to state and according to the tenancy agreement, so make sure you’re familiar with these details. It’s a good idea to ensure any periodic lease agreement you present to tenants at the beginning of their tenancy outlines what would happen if you wish to sell the property so they are aware of the process prior to entering the agreement.
Issue correct notices within specified timeframes
Regardless of the type of agreement you and the tenant entered into, you are required to issue the tenant with written notice to inform them of your intention to sell the property before the property is listed for sale. The amount of notice given to a tenant before putting a property on the market varies from state to state. Giving the tenant as much notice as possible will allow them time to plan and, if necessary, relocate. This will also help to foster and maintain a good relationship with your tenant.
Keep the tenant informed
Passing on as much information as possible from the selling agent to the tenant and acting as a go-between for each party will reduce the likelihood of surprises down the track.
The selling agent must discuss open inspection times with the tenant and seek their permission to use photographs that contain any of their possessions in marketing materials.
It may be worth checking to see that a tenant is happy with the arrangement and that the selling agent obtained the agreement in writing.
Keeping up appearances
If the property is nearly due for a routine inspection prior to being put on the market, you may wish to bring the date forward and conduct it before open inspections commence.
This will allow you to identify and action any maintenance issues prior to the property going on the market.
After the sale
Letting a tenant know you appreciate their understanding during the sales process is a great way to keep them on side. Once the property has been sold, it can be a nice gesture to offer your tenants an excellent reference that they could use to apply for their next rental property.
Collections: Property Investment