Do You Own Unwanted Rental Property?

As a landlord, there are a slew of reasons you may want to sell your rental property. Maybe you’re experiencing a major life event like relocation, and don’t want to be a long-distance landlord. Perhaps you’re exhausted by the annual—or monthly—stress of vacancies, including making repairs, showing your property, and negotiating a lease. Maybe, it’s the time spent fielding calls from your tenants while you are at work, sharing an afternoon with the family, or trying to relax in the evenings. Regardless of the circumstances, you are not handcuffed to your rental property.
This article will explore some of the most common questions, when selling an unwanted rental property.
  1. Can I sell a property with an active tenant and lease?
  2. How do I show a renter-occupied property?
  3. What if I have a problematic tenant who will hurt my chances of selling

CAN I SELL A PROPERTY WITH AN ACTIVE TENANT AND LEASE?

Yes, you can sell a property with an active tenant and lease. While this adds an extra layer of complexity to the transaction, some buyers may view this as an added benefit, since there is no need to re-lease the property with a tenant in place. Also, you’ll save on holdover costs which would come from owning a vacant property.
Upon selling your property with an active tenant, the new owner will have the same obligations to the tenant as you had. The Pennsylvania Landlord Tenant Act of 1951 (68 P.S. § 250.104) is explicit regarding landlord-tenant rights after a sale, stating that “a person who acquires title to real property . . . shall be liable to the same duties . . .  as the person from whom title was acquired.”

HOW DO I SHOW A RENTER-OCCUPIED PROPERTY?

Communication and reasonability are key here! Even though you own the property, you typically cannot enter your property whenever you want. Your tenant has a legal right to quiet enjoyment of their rented space.
You also have property rights, including reasonable access to the leased property. So, reach out to your tenant to determine a mutually acceptable time for a showing (24 – 48-hour notice is typical). Ask your tenant if they’d be willing to depart the property during the showing. Also, if you’re worried about whether the property will be clean, I have yet to meet a tenant who didn’t accept the offer of a free, professional home cleaning.

WHAT IF I HAVE A PROBLEMATIC TENANT WHO WILL HURT MY CHANCES OF SELLING?

There are a variety of options when you have a tenant who is breaking the lease terms or being a nuisance in some way. The correct course of action depends on the status of the lease and the reason you want to evict the tenant. Regardless, we recommend retaining an attorney to ensure the process is as seamless as possible. Here are some common ways you can proceed:
Waiting for Lease to Expire. If your tenant’s lease is about to expire or has expired, and you want the tenant to vacate, you must provide the legally mandated Notice to Quit expressing your intent not to renew the lease. Under Pennsylvania Law (68 P.S. § 250.501), a 1-year lease requires a 15-day Notice to Quit in writing.
If you don’t provide Notice to Quit, the tenant won’t be obligated to vacate just because the lease expired. Unless your lease says otherwise, your tenant will likely transform into a holdover tenant—one who pays rent after the lease has expired—and the lease will become a month-to-month agreement.
Similar to a 1-year lease, a month-to-month tenancy requires a 15-day Notice to Quit in writing. Landlords would be wise to preempt holdovers via lease language. Section 21 of the Philadelphia Association of Realtors’ Form Residential Lease offers a great example of this language.
Invoking the Early Termination Clause. If your tenant’s lease is still valid, review the lease to see if it contains an early termination clause. This clause would typically require providing a few months of rent to the tenant as a buyout, in exchange for ending the agreement.
Filing for Eviction Based on Non-Payment. If your tenant is in breach of your agreement due a payment default, the first step is to send a Demand for Payment, unless the demand is waived in the lease. Then, if the tenant does not submit payment, you must send a Notice to Quit. Topic #3 goes into further detail about the eviction process.
The eviction process can sometimes go quickly and smoothly, but be prepared for complexities. If you need to evict your tenant before selling your property, make sure you consider how eviction proceedings could impact your timeline, and always get legal counsel.
Ultimately, the decision to sell your rental property is yours, and we are here to help. Whether you’re relocating, exhausted by being a landlord, or any other reason – we look forward to working together!
GrossmanGroupLLC.com | Office: 267-223-7788

Disclaimer: The content provided on this page is general consumer information, not legal or regulatory advice. The information above may include links to third-party resources. We do not endorse the third-party or guarantee the accuracy of this information.