Selling a property that still has tenants living in it can be a delicate process. You and your chosen salesperson need to communicate well with your tenants so that the sale process can run smoothly. As the property owner, it's important to understand your rights, your tenant’s rights and what you can and can’t do regarding selling your property.
Understanding What To Do When Selling An Occupied Rental Property
Even though your rental is an investment to you, it’s home for your tenants - so it’s important to approach the process with care and clear communication
Give A Sale Of Property Notice To Your Tenants. First, you must let your tenants know, in writing, that you will be putting the rental property up for sale. You can do this either before you list it for sale or at the same time.
You can explain that you’re selling, and they can ask any questions regarding their tenancy. Some landlords choose to sell vacant properties, so their tenants must move out before the property is sold. Conversely, the new owner may be an investor and become the new landlord, allowing the tenants to continue living in the property.
Prioritise Open Communication At All times. Focus on early, respectful communication to help maintain a positive working relationship with your tenants, potential buyers and your real estate agent. This will prevent confusion, conflict and mistakes.
You should be open about your intentions. Discuss important details such as the ownership of the property, if they can still live in the property, how you will handle viewings and so on.
Respectful communication will contribute to a professional, streamlined selling process, improving the sale for everyone involved.
Understand How You Want To Sell The Property. What you and your property buyer plans to do with your rental property will affect how you should go about the sale. There are three main scenarios when it comes to selling an occupied rental property:
- Selling a rental property where the buyer will become the new landlord. In this case, the buyer will take over as the landlord and may continue to rent out the property to the existing tenants.
- Selling a rental property to a buyer who wants a vacant property. If the buyer wants an empty rental property, then the current tenants must move out before the sale takes place. The settlement date will need to be in line with the appropriate notice periods for a tenant vacating a property. Tenants must be given a notice to end the tenancy.
- Selling a rental property where you want to advertise it as a vacant property. You may want to advertise a property as an empty space, rather than one with current occupants. In this situation, current tenants must move out before the property is marketed and again correct notice to vacate must be given.
Set Clear Expectations With Your Tenants. You must communicate with your tenants to work out access to the property. Naturally, when selling your space, your buyer will want to see the interior and exterior of the building. This is more complicated than selling a vacant property because this is your tenant’s current home.
You must get permission from your tenants before you enter their home to take photos or show potential buyers around. While tenants cannot unreasonably refuse access to the space, they can set conditions like:
- Limiting access to the home during certain times or days.
- Refusing open houses and auctions at the property, instead requiring appointments for viewings. Tenants also have the right to be present during viewings.
- Refusing to allow photos to be taken of personal possessions.
Once you have established boundaries and a schedule with your tenants, you should put it in writing so everyone has a clear outline of your plans. It’s also worth noting that tenants often benefit from allowing reasonable access and presenting the property well. A tidy, welcoming home is more appealing to potential investors — and that could increase the chance of the new owner wanting to retain them as tenants after the sale.
Provide the New Owner and Current Tenants With All the Right Information. Once your property is sold, it’s important to make sure everyone is kept in the loop. You’ll need to notify your tenants of the new owner’s name, when they’ll be taking over and provide appropriate contact details. Likewise, the new owner will need a copy of the current tenancy agreement and any relevant documents.
Work With an Experienced Local Southland Real Estate Team. Selling a tenanted property can be complex — but you don’t have to navigate it alone. Working with an experienced local agent who understands the Southland market makes a big difference. At Todd & Co Realty, we also have an in-house property management team, which means we’re well-placed to offer practical advice around tenancy requirements and ensure everything runs smoothly for both you and your tenants. Whether it’s coordinating access, communicating with tenants or advising the buyer, our team is here to support you every step of the way.
Selling A Rental Property In Southland: Successfully Navigating The Process With Todd & Co Realty
Learn more about what we at Todd & Co Realty can do for you by visiting our website, or reach our team today on 03 218 7124 or online.
Selling an occupied rental property may sound confusing, but it doesn’t have to be. We at Todd & Co Realty are here to help you with yours.
Enjoy a streamlined selling process with Todd & Co Realty.