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How To Sell a Rental Property When a Tenant Currently Lives There


If you’re looking to sell your property, you probably already know that you’ll have to get it ready for showings and plan ways to advertise it. However, you may also find that there is a major roadblock on the path to selling: someone is currently living there.

Rest assured, this does not mean hope is lost — you can still sell the property if you work through the correct legal channels and take the right actions.

You may even find that your current tenant is willing to work with you to make the process even simpler.

To help you out, our Baltimore property management team has put together this guide that will give you the information you need to sell your occupied property. Check it out:


How a Landlord Can Sell an Occupied Rental Property

First of all, let’s go over several of the reasons you may find yourself wanting to sell a property that is currently inhabited by a tenant:

  • You became an “accidental landlord” because your property wouldn’t sell or because you inherited the property.
  • You have decided that you no longer want to be a landlord.
  • You aren’t getting a good return on your investment, and you’re looking to cut your losses.

Whatever your reason is, you’ll be happy to know that you can sell your property and that the process doesn’t have to be difficult.

Let’s talk about what you need to do to stay out of legal trouble and avoid upsetting your tenants when selling an occupied property.


Give tenants the proper amount of notice.

As a landlord, you are legally required to let tenants know ahead of time if you need to end their tenancy. You must do this by sending the tenant a letter that clearly states the date by which they must vacate the property (within the required notice time that varies from state to state).


In Maryland, here’s what you are required to do for each type of lease:

  • Week-to-week lease – You must provide the tenant with a one week notice.
  • Month-to-month lease – You must provide the tenant with a one month notice.
  • Yearly lease – In most cases, you must give tenants a three month notice. However, certain circumstances call for different requirements. For example, in Montgomery County, you only need to give tenants a 2 month notice unless the property is a single family home. Research the local laws in your area to determine exactly how far in advance you need to let the tenant know that the lease is being terminated.

Keep in mind that you do not need to give your tenants a reason for the tenancy termination if they have a month-to-month lease. That being said, it may be a good idea to do so if you want them to cooperate while you show the occupied property. Plus, if you let them know that you are looking to sell the home, you may find out that they are interested in buying it, making the entire process easier for both of you!


Work with your tenants to make the situation easier for everyone.

Not all tenants are going to be thrilled to know that they must move out sooner than they planned. That’s why it’s important for you to always build healthy tenant/landlord relationships – it’ll make selling the property while they still live there much easier.

Often, agreeable tenants will quickly begin looking for a new place to live once you inform them that the lease is being terminated. After all, if they don’t, they’ll have to deal with showings and cleaning the property constantly to make sure that it looks good to potential buyers.

However, if they must stay in the property while you show it to prospective buyers, you may benefit from offering to work with them by:

  • Lowering their rent for the duration of their lease
  • Helping with moving costs
  • Guaranteeing them enough time to find a new home

This is a great way to express your appreciation for their patience and to make sure that they remain cooperative during the selling process.


What if your tenant is uncooperative?

If the tenant remains in the property past the lease termination date, you may need to consider beginning the eviction process. However, you can try a “cash for keys” tactic before you evict your tenant, as the eviction process can be costly and time-consuming (up to 8 weeks, in some cases!).


“Cash for keys” simply means that you pay the tenant to move out early. You can do this by:

  • Offering to make up the difference between what the tenant is paying at your property and what he or she will need to pay at a new property for a specified amount of time
  • Offering to pay their security and pet deposits at their new residence
  • Offering them whatever amount of money you can afford

This is a great way to remove a tenant who is living in your property without permission quickly while avoiding the eviction process.

If all else fails, you may find that it is easier to wait until the tenant willingly vacates the property before you sell it. While this is not ideal, it could save you a lot of money and help you avoid the hassle of showing and selling your property while an uncooperative tenant lives there.

Tip: If you’re interested in learning more about how to deal with difficult tenants, check out this blog post!


In Conclusion

If you’re looking to sell an occupied property, you’ll find it’s much easier if you have built a good relationship with the tenants who are living there.

It’s easy to understand why anyone could get upset learning that they must move out of their residence before they’re ready to, but explaining the situation to them thoroughly will often help them become more receptive to what you’re saying.

Communication is key, and you’ll want to let them know that they will be informed ahead of time when you show the property, enter the property, perform inspections, etc.

And remember – if you need help drafting a lease agreement that allows you to show the property while a tenant still lives there and/or terminate a lease early, consider a Washington DC, Laurel, and Baltimore property management team like Bay Management Group.

We’ll help you make sure you cover everything necessary in your lease agreement so you can sell your property as needed. Contact us today to learn more.