Customer Relations Selling/Listing

Occupied property: How to sell homes with a tenant

The following information is only suggestive, not mandatory or required, but may greatly assist you in avoiding confusion later on in the transaction.

Ask about tenants when taking a listing
Before taking the listing, it’s important to question the seller about the current status of the property. Is the seller living there? Is there a tenant in possession? Are there any future leases on the property? If there is a tenant in place (or the property is subject to a future lease), as a listing agent, you may want to request a copy of the lease upfront. This could help you determine whether the lease requires the tenant to vacate upon the sale of the property, or whether a buyer would be purchasing the property subject to the lease terms.

If a buyer would purchase the property subject to an existing lease, it’s a good idea to supply this information in the MLS so interested buyers realize that it’s tenant occupied. Although the sales contract ultimately dictates whether the property is subject to a lease, this early warning can avert confusion or annoyance on the part of any buyer who wants to make an offer.

Discuss a plan with the owner/landlord
If the lease doesn’t require a tenant to leave if the landlord sells the property, the next step is to determine how much time is left on the lease. If there is a short time, does the landlord intend to extend the lease or enter into a new lease with a tenant before closing occurs? If the landlord does not intend to extend or renew the lease, the landlord should allow ample time for the tenant to move out.

Some buyers assume the property will be empty by the time they close if sellers time the listing to coincide with the end of a lease. However, that doesn’t always work, and far too many Realtors call the Legal Hotline as the closing day looms to ask what can be done about tenants who refuse to leave.

If the lease doesn’t end prior to closing, the listing agent should make sure any contract the landlord enters into with a buyer addresses the tenant’s occupancy (this will be addressed in Part II of this series).

Is the tenant on board?
Another important question for the seller: What is the relationship between the landlord and tenant? Several Legal Hotline calls relate to listing agents who are unable to show the property due to a non-compliant tenant, which obviously makes the listing agent’s job difficult.

Per the Landlord-Tenant Act, a tenant cannot “unreasonably withhold consent to the landlord to enter the dwelling unit … to exhibit the dwelling unit to prospective or actual purchasers.” (Fla. Stat. § 83.53(1)). This means that a tenant cannot flat out refuse to allow the landlord to show the property without reason.

In the event the tenant makes this error, the landlord’s option is take legal action. Will the landlord do this? Or will the landlord expect you to simply “deal with it” on your own? Having a landlord willing to take the appropriate steps in the event of a non-compliant tenant will make your job much easier.

When it comes to rentals, many people screen tenants, but it’s equally important to screen the landlord who wants you to represent the listing for his rented property.

This article was written by Meredith Caruso who is Manager of Member Legal Communications for Florida Realtors

Original Source

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