Selling property during Tenant's Lease

6 Replies

I am considering selling a property I've had for a few years. The tenant's lease goes until August 2020; however, given the cooling market, I wanted to get the highest selling price right now. I am wondering about my options on how to move tenant out / break lease. Below is the provision about Landlord selling the property as part of the lease agreement : 

"Landlord also has right to list and sell the property with 120 days notice to the tenant and a move and relocation fee of $1,500 paid to tenant at move out and provision of alternate rental address of comparable rental lease value. Tenant agrees to assist in the showing and availability to show the home as required with a rent reduction of $100 per month while the house is listed."

To me, it seems that I would incur a one time $1,500 fee plus possibly $100 rent reduction if I choose to list the property while the tenant is still there (might wait until after they leave, so I don't have to reduce rent). However, I do not understand what the second part of that sentence means (starts with "and provision of") ? Does this mean I would need to assist in finding another place for them? Would I be incurring any additional costs with this? 

And finally, am I correct in thinking this paragraph allows me to essentially 'break' the lease to sell the property? Are there any other factors I am not considering (aside from costs of fixing property up and paying mortgage when tenants leave)?

Really appreciate any help as this is my first property sale. Of course I will seek an attorney when that time comes, just looking for some advice right now. Thank you!

Not to ignore your main questions, but you can sell a property with a lease. Some buyers prefer it because it's turn key. Is there a reason you are bound and determined to kick them out? Is their rent really low or something?

@Jai Nigam , I think that that sentence is trying to say is that they have to rent something at a similar rate of rent. If they decide to move in with mommy & daddy and not pay rent then they aren't entitled to that money. I'm no English major but that is what I suspect it means.

@Allan Smith , single family home rentals are likely to sell to an owner occupant not an investor. So, its understandable to clear the place of the tenant prior to selling. 

@Allan Smith  So I did not want to sell to another investor because I would not be able to sell it for as much vs. selling to a family who wants to live there. Naturally, investors are looking for a deal while residential buyers typically are willing to spend a little more

Ahh makes sense.

provision of clause sounds like you just give them another option of a similar place to live.

give them 120 days notice and you are off to the races. List it at 90 days or so maybe.

If you want to sell it to an owner occupant, I would get the tenant out. Tenants are not motivated for you to sell the home they are living in, so the showings will never go as well as you want them to. 

If you are set that you absolutely want to sell, then I would go ahead and give the tenant their 120 day notice so you will have a vacant home to sell in the Spring. 

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