Selling A Tenanted Property
Having a home on the market is stressful and time consuming! If you are selling a tenanted property, this holds as true for your tenants as it does for you. Having your tenants onside can make a huge difference to the success of the whole undertaking – so here are a few hints on how to work with your tenants for a successful outcome.
Tip 1: Keep the tenant happy and on side
If your property is tenanted, put yourself in your tenant’s shoes: they are required to always have the home presentable, and allow strangers to walk through their safe place. Just because you want to sell it, doesn’t mean they want the disruption to their lives.
It’s important for you to try and work with your tenant. Always be upfront with them. Let them know your plans before the property goes on the market – there is nothing worse for a tenant than to come home to a For Sale sign on the front lawn! You need them on your side, but they are not going to co-operate with you if you don’t communicate with them.
You may consider offering to reduce the rent by $50 per week for the inconvenience of a Home Open each weekend – the out of pocket expense to you really is minimal, and gives you and the agent the best chance to sell the property.
If your tenant is really unhappy about the property being on the market, consider offering to terminate the lease and have the property sit vacant. If you weigh up the cost of covering the mortgage property maintenance, versus a possibly reduced opportunity to sell due to limited access or a messy home, this may prove a viable option.
Tip 2: Consider how the home will be presented.
A tidy, well-presented, clean and fresh home can make a huge difference to the outcome of a sale – and a better sale price.
Consider how you can make this experience a little easier for the tenant. Perhaps offer to have the lawns mowed and gardens weeded on a regular basis until the property is sold, or offer to have the property professionally cleaned once a week.
This ensures the property is presented well, and also keeps the tenant on side and inclined to allow access and home opens.
Tip3. Gaining access to show the property to prospective buyers
A property owner and their agent have the right to show the premises to prospective buyers, and the tenant is required to allow entry.
However, the owner is also obligated to ensure they protect the tenant’s right to quiet enjoyment of the premises.
The wording in the Residential Tenancies Act, section 46, Part 2G reads:
for the purpose of showing the premises to prospective purchasers, at any reasonable time and on a reasonable number of occasions, after giving the tenant reasonable notice in writing;
What does this mean?
The requirements for a lessor to enter a property for the purpose of showing it to prospective buyers are as follows:
- At any reasonable time,
- On a reasonable number of occasions,
- After giving the tenant reasonable notice in writing
Reasonable time:
- between 8am and 6pm on a weekday; or
- between 9am and 5pm on a Saturday; or
- at any other time agreed between the lessor and each tenant.
Although it is common courtesy for tenants to head out for a little while when an inspection is taking place, be aware that there is no official requirement for them to do so.
Tip 4: Ending the lease
A lease agreement takes priority over a transfer of ownership. An owner/agent cannot ask the tenant to move out if they are on a fixed lease and likewise, the tenant cannot decide to move out when the property sells.
Have a periodic lease? If the owner has entered into a contract for sale of the premises and under that contract they are required to give vacant possession, they can serve the tenant a minimum of 30 days’ notice in writing of termination to vacate the property.
If the lease is periodic and there is no contract of sale, but the owner is wanting the tenant to vacate as they want the home vacant, then the required notice to the tenant would be a minimum of 60 days’ notice in writing.
