Tenant Occupied: How To Tell Your Tenants You Are Selling?

Have you got a perfect house to sell? It can be a condominium, a home, or a pair. If this is a tenant occupied property, what will you do about the current tenants? A rare situation is selling this house with tenants.

You can sell your property with tenants, and you are not required to notify your renter about your selling intentions. It is wise to inform your renter about your plans to avoid putting them in a sticky situation. Other than a traditional buyer and seller agreement, the transaction involves other properties. 

Note that your current contract with your renters will be transferred to the new buyers as part of the apartment’s transaction. For buyers, it may be a very challenging situation. In most circumstances, the new leaseholders will assume lease control until it expires.

You’ll get more details if you keep scrolling through this guide. Be ready, as we are going to start with the basics.

How To Tell Your Tenants You Are Selling

Overall, the procedure does not have to be difficult! You can maintain situations if you adhere to some instructions. You can tell your tenants that you are selling that particular house by doing the following tasks:

Talk With The Tenant

Although it is not required by the law to inform the renters of your intentions to sell the rental property, it is normally in your best interest. Clear out immediately because you may need to coordinate showings and other examinations with tenants.

Your renter can ask anything by establishing communication channels, and possible issues will be handled promptly. You can do this by giving them notice.

Landlords Must Provide Adequate Notice

A landlord may terminate a contract only for the criteria specified in the agreement. Mostly, you have to give a written notice in which you wish the tenants to leave the house. To terminate a tenancy, you must use the right form. You should use the right notice form accordingly.

Remember that you can’t force your tenants to leave the house if they don’t want to. The new homebuyers can buy your property with tenants in it. Because the tenancy remains even if you intend to sell a rented property. Moreover, it’s your will to sell a tenanted property.

Make sure that all the appropriate information is mentioned in the written notice. If you fail to provide the tenants with the necessary facts, your notice may go to waste and become null. A typed text or an email is not considered a valid notice.

Reasons For Terminating Tenancy

Suppose you will sell your property because of some tasks your tenants did that they were not supposed to do. This is commonly referred to as “For Cause” termination. The following are some instances of “For Cause” justifications for terminating a tenancy:

  • You are going to sell your home
  • Tenants failed to pay the rent
  • Tenants are harming your home
  • Tenants are causing annoyance to you or someone else in the society

Publicize The Property

You can talk to your tenants about selling your property. Moreover, you must officially advertise your property and mention the possibility of real estate investment property. It is preferable to mention that your property is rented and the expiry of the current lease period.

With the coordination of your tenants, get a good picture of your property. Plan a schedule with your tenants for showings.

Close The Deal

Any active leases must be handled as an essential part of the sale agreement while signing. Give this sale agreement to the new owners, who can choose how to continue. The owners may decide to keep the tenants in the building.

Or they may also decide to let the lease run its course. Once the property has its new owners, this agreement and its fulfilment isn’t be your headache now.

What To Know When Selling A Tenanted Property

When selling a tenanted property, several possible outcomes depend on the circumstances. You must agree with the new buyers to wait for tenants to leave the property so you may shift here.

You may transfer the lease agreements to the new owners if the tenants are willing to stay here as rentals in the same property. So, the lease policies and mode of payments must be under the knowledge of new owners.

You can only force your tenants to sign a new agreement if the previous one has expired. They can continue leasing until it expires, even if the buyers have bought your rental property. It would be best if you made sure that new owners must not increase the rent before one year.

Check out How to Sell a Tenant-Occupied Listing:

Is It Hard To Sell A Rental Property With Tenants

Yes, sometimes it becomes hard to sell a rental property with tenants. Because with reputable renters in place, your home will be more appealing to other landlords as they want to avoid advertising it or trying to locate tenants on their own.

Selling a rental property can be challenging since the buyer wants to shift in that house simultaneously. In this case, the buyer must wait for the current tenancy’s expiry. Otherwise, buyers can also create a new lease agreement with the tenants.

Selling A Home With Tenants

Selling a home with tenants can be challenging or easy. Moreover, it has bright and dark sides as well. So, check out the following pros and cons of selling a home with tenants:

  • Pros

A list of pros is given below:

  • Ongoing Income

Pay rent can be collected while a house is sold if tenants are already living there. One or more months of absence are sufficient to show you in a red flag if your rental business runs on a razor-thin profit margin.

You can experience a net income crisis if you evict the home from tenants and it takes a while to sell.

  • Watching Home

Tenants offer the advantage of constant home monitoring. When your house is empty, there is a greater chance of anything bad incident than when it was filled with tenants. The common destructions when your house is empty are the following:

  • Destruction of property
  • Leakage
  • Damaged plumbing
  • Other unanticipated disasters

If your house is empty, then hire a caretaker for it.

  • Maintenance

Tenants can perform the essential maintenance and minor repairs connected with getting a house showing notice after selling their property news. They may maintain the home’s cleanliness for showings, pick up the mail, and cut the grass.

  • Alternative Financing Methods

A smaller pool of possible purchasers is inherently involved when selling a property with renters living in it. The benefit of having renters is based on the money they generate. If the monthly paying rent matches monthly expenses, the buyer may be eligible for a lease on the house.

  • Date And Time Of Lease’s Termination

You can extend the lease or rental agreement up to spring if it’s going to end in winter. It is better to avoid having the house sit empty all winter. Because there is a larger risk of unexpected maintenance problems with the house.

  • Cons

Have a look at the list of cons of selling your rental property:

  • Less Ownership Pride

Tenants often do nothing to maintain the house in show-ready condition for showings and don’t have a financial interest in its selling. Even though the majority of the renters during selling time are cooperative.

But still, a rental house rarely has the amount of glitter and polish that potential purchasers need to be drawn in.

  • Renovations Are More Time-Consuming And Costly

It is more challenging to arrange upgrades and maintenance if the tenants still reside there. Whitewash and re-flooring take more time and money than they should. Moreover, all these maintenance delay your ability to offer the property for sale.

Additionally, certain improvements might not be viable while renters still occupy the space. Minor maintenance can be done throughout the lease if your house is in good shape. But larger maintenance is quite difficult to do.

  • Booking Showings Is More Difficult

According to the privacy and freedom of tenants, some limits must be respected. This makes showing the house during their lease more challenging. This is simpler if your contract specifies that you may show the property to prospective purchasers.

But since you’ll be able to display the property less frequently, your chance of obtaining a proposal will be lower.

  • A Limited Number Of Buyers

When you sell a house with renters already living in it, you have to exclude the majority of shareholder purchasers who are in a hurry to shift to a rental home. In certain situations, a buyer can hold out on moving in until a tenancy expires for the next few months.

But you’ll discover that you restrict your selling to main investors seeking strong offers.

Showing A House With Tenants

While the lease is active, the tenant is legally entitled to peaceful enjoyment. So, if you sell your property and want to show it to the buyers, you must notify them. This notice must include the following:

  • The purpose of entering the rental property
  • An exact time and date to enter the property and this timing should be according to your tenants’ schedule and will

So, you must provide short notice 24 hours before displaying your property to new owners. You and your representative are obligated to guarantee the security of the tenant’s belongings while the rental property is being shown.

A tenant may deny any access and entry to your property which is unjustified or illegal. Unjustified entrance may include displaying your property for a whole day on repetitive days. You must give appropriate notice to avoid being considered an unlawful and unjustified entrance.

Tenants may apply for dispute resolution if you fail to convince or inform your tenants about a peaceful entrance into the property. If you think your tenant has arbitrarily denied entry to the rental property for inspection, you can take action to fix the situation.

The renter is not required to leave the apartment during showings because you and the buyers must weigh the tenant’s freedom to peace and privacy against their requirements to sell the apartment.

Tenant Refuses To Leave When House Is Sold

What happens if your tenants decide to stay here in your home? The problem arises at that point. Like are they stubborn to stay on your own property? It’s important to understand your legal rights before taking an action.

  • Whatever the circumstance, you should always first review your existing lease contract before taking any action
  • You can decide what to do by consulting the signed tenancy
  • It may describe your possibilities, like a written statement of what to do after the tenants refuse to leave your property even if the house is sold
  • If your contract does not contain wording of this nature, you should appeal to the law since it always takes priority over leasing agreements

The tenants may unjustly deny access to exhibit the apartment or give potential buyers false or inaccurate information. So it would be best if you took the following actions in this case:

  • Talk to the renter about the problem
  • Please encourage them to get in touch with the Residential Tenancy Branch
  • Serving a one-month notice to terminate the lease for goods

As tenants may challenge your notice of early termination clause by requesting dispute settlement with the Residential Tenancy Branch within the allocated time. If the tenant doesn’t challenge your notice, he must leave the property on time.

Now you can submit a request for resolving disputes to demand property ownership.


Can You Sell A House Without Telling The Tenant?

It’s your property, and it’s all up to you when and to whom you want to sell it. But remember that your tenants have some rights, and their problems, opinions, and points must be respected.

Before selling your property, you must notify your tenants by giving them short notice. Via notification, explain your motivation and plan about selling a home, showing your property, and maintaining your property.

Can A Landlord Decide To Sell The House You’re Renting?

Yes, a landlord can decide to sell the house even with a renter in place. In this scenario, the new owner may take on the role of the landlord and is required to register. Moreover, the terms and conditions with the previous landlord will be continued until the previous tenancy expires.

When this agreement expires, the new owner might:

  • Permit the tenancy to continue under a long contract
  • Either provide the renter with a new rental agreement
  • Or may start the eviction process

Can My Landlord Have A Key To My Home?

Yes, your landlord may have a key to your house and can enter in specific circumstances.

During any emergency or crisis, your landlord can enter without informing you. Usually, a landlord must:

  • Send you a notice explaining the reason to enter
  • Provide you with a 24 hours notice before they arrive
  • Enter your house between 8 in the morning to 8 at the night

However, your landlord is the owner of the property in which you are residing, so it’s lawfully correct if he is holding the keys to the property.

What Are The Tenant’s Rights When The Owner Wants To Sell?

Both renters and landlords are entitled to certain privileges. Both should follow some rules, and a house must be sold well. The following are some rights of tenants:

  • Tenants can stay in your home if the fixed tenancy agreement is still in effect
  • They have the right to stay if the landlord is tricking them into making one or more members leave
  • They have the right to negotiate a new tenancy with the new owners of a home
  • They can attend board meetings
  • They can send their landlords a ten-day notice of their intention to move after getting notice for several various reasons
  • If the tenancy is going to expire, they should be granted a one-month opportunity to leave once the house is sold
  • They have the right to be aware of not vacating the home for showings according to the law
  • They have the right to confirm that their landlord has given them a 24-hour notice

What Does Selling With Sitting Tenants Mean?

A sitting tenant is a person who is renting a home whose owner has made the decision to sell. The existing tenant will be able to stay in the home after the transaction has been completed and there is something to deal with the landlord.

Even though it seems difficult, selling a house with a renter in place is doable. There is no need to involve a real estate agent. When the property is offered for sale with the phrase “tenants/in situ,” it signifies that a tenant is already occupying it.

This implies that the renter residing in your home may continue to do so throughout the sale and after the sale, following the condition of their tenancy.

Final Thoughts

Even though most landlords keep their homes for a longer period of renting arrangements, there is still a moment when you wish to sell a home. By doing so, you can jump into the next investment opportunities.

Selling rental properties is easy. But the area decides the new owners of your property and whether they are willing to take an occupied rental property, which is quite difficult. If so, you must see the fixed term lease completion of your tenants before selling a house.

We hope it is all clear now about the selling procedure of your rental property. Take crucial steps regarding selling your property, after reading this guide, and you’ll be successful in selling your home. Once you are done, take a cup of coffee and relax, as one of the biggest tasks on your to-do list is all completed.

Have a great day! 

Sabine Ghali
Sabine Ghali
Helping real estate investors build wealth over time

Sabine Ghali, Managing Director at Buttonwood Property Management, Award Winning Real Estate Broker and an Entrepreneur at heart. Sabine is on a mission to help investors create real estate wealth over time in the Greater Toronto Area. Sabine is published in a number of media outlets, including Toronto Star, The Globe and Mail, Toronto Sun, Entrepreneur, Forbes, and Gulf News, among many others.