Tenant rights when landlord is attempting to sell property...

14 Replies

Hey all,

Quick question. I live in Utah, and some of my friends live in SLC. They are currently renting in Sugarhouse. I'm not positive of the terms on the lease, but something smells fishy to me.

Their current landlord is trying to sell the property. The lease they are on extends well into the summer of 2016. The landlord is making the tenants leave the property, and clean before she shows the property. Whether they should to be respectful is not my question. From what I have been told (which could be complete crap), tenants cannot be required to leave thr property for a owner to show the property. I also assume they can't be required to do anything they don't want to in order for the owner to show the home.

I could be way wrong here, and maybe there are some rules. I'm looking to gain a better personal understanding for Utah on this matter, and also to let my friends know if the owner is in the right or not. 

p.s. Hopefully they are keeping the place clean anyways :) So far, they have been compliant, and even went as far as to take down decorations etc. for the owner.

It all depends on the lease agreement. In mine I have the right to enter the property with 24 hours notice. They could use that to show the home. However I can't require them to leave. 

I too have rental properties in Utah and all of my contracts require I give 24 hour notice to enter the property (unless of an emergency, etc.) It is very likely their contract states that the landlord can terminate the contract with 30 days notice (for example), but its very unlikely that the language states they have to vacate the home while it is being shown to sell.  They will just need to look at the fine print if they feel the need to push back a little.  I also sold a home that I had been renting to long term tenants.  I know it can be challenging when a buyer calls and asks if they can view the home within the hour, etc.  I never asked for the tenant to leave and always asked the tenant for their schedules and attempted to schedule viewings when it was best for my tenants. Your friends seem to be flexible and accommodating, wish I had a rental in Sugarhouse I could offer them.  

Unless there's something specific in the lease - which I think is going to be unlikely - I don't think they can really be expected to clean or leave for showings, though allowing showings with good notice and at reasonable hours is generally expected. 

As an agent I show tons of rental properties and I always feel bad going through tenant occupied homes (just not bad enough to not show them.) The tenants are often good sports about it but I can tell that it wears on them. They didn't sign up to host 2-3 strangers a week. It's especially frustrating if the property is overpriced and the property just sits on the market for months. The tenants for sure take the biggest toll in those situations. Imagine how far it would go to "partner up" with the tenants and offer to take $50 bucks off their rent each month if they're willing to tidy up and disappear for showings. You'd have happier, more compliant tenants, and you'd probably sell the property much faster and for more money. That won't really help your friends, but I think it's food for thought for all of us as investors

I'm an agent and listed a rental house for sale. I pointed out to the tenants that if they didn't want to be bothered by a whole bunch of showings for weeks or months, then they might consider making the place look clean and beautiful. Sure enough, they did just that. It sold on the second day it was listed. Everyone was happy! :)

We have it in the lease but try to have a one shot open house that the tenants mutually agree to. So far it has been very successful.

For the SFR tenants with 2 children of the Corn we gave them a gift certificate to the local restuarant that has 'kids eat free on Sundays', & they were gone for a couple of hours.

This is not legal advice.

The tenant should have a right to quiet enjoyment of the property.  If the tenant can show these showings are excessive and interfere with their use of the property a judge should be sympathetic.

Is this a FSBO or listed? If it's listed, I would have the tenants speak with the agent to have some restriction on "window shopping". Some agents require an offer, some a pre-approval before showing leased properties.

Keep in mind, if they have a lease that extends through next summer, it is unlikely that an owner-occupant will buy the place as they will not be able to get an occupant loan.  The listing agent can head these showings off as well.

There's also something called constructive eviction where the landlord somehow makes the property unlivable.  This is something that a landlord would very much like to avoid because penalties are stiff.

I've never seen any lease that requires tenants to vacate the premises for showings.  That's beyond the pale.

Another option to consider is a lease buy out.  If the landlord wants to pony up some cash, they can show an empty house whenever they like.

Hey everyone. Ya don't need me. :) All great advice! It depends on the fine print of the lease. Generally, a landlord cannot force a tenant out for showings, or even make them clean. I've never seen that in a lease. Typical is just 24 hours notice for landlord to enter. Further, a landlord cannot breach the lease by terminating before the end of the "term" of the contract. That is, landlord cannot force tenants out before the end of the term. Knowing the actual "term" might take a review of the lease, and any extension addenda to confirm. But, if the actual term is through the end of the summer, landlord cannot force them out before that term. Any buyer would take the property subject to that lease.

If the landlord is a licensed agent, or using an agent, they should know that. And the tenants should call the Division of Real Estate, or an attorney, if they think the landlord is strong-arming them.

Jeff

STOP the lookie-loos;  require a Proof of Funds letter AND a loan Pre-Approvail as well as qualification for a showing.

It saves the agent time and  effort weeding out the non-contenders and shows respect to all parties concerned.

I see lots of advice about reading the lease, which is good advice but just because it's in a lease does not make it legal or enforceable, so even more than checking the lease, check the state law. 

Many laws state 24 hour notice to enter the property except in cases of emergency. Some go up to 48 hour notice.

I believe this landlord is overstepping her bounds, but I also don't know the laws in that state...

If its not in the lease I believe its law to give 24 hour notice to enter. Might be different state to state but check on tenant laws. Also, I have tried to sell properties with tenants in them and they never cleaned up and some times didn't even let the people have access. It's easier to sell it once the tenants are gone. They need to review the lease. Good luck.

Thanks everyone for your replies! Keeping my fingers crossed, and hope the experience takes a swing in the better direction for the tenants. Your comments were insightful, and very helpful.

Thanks again!

Check the leases! The ones I have in California and many that I have seen in California discuss selling provisions. My lease requires me to be able to show the house with 24 horses notice 60 days from when notice was given.