There are times when a homeowner wants to sell a house with tenants already living in the house. Sellers may be selling multiple family properties and the purchaser wants the tenant to remain in the property. Buyers for a single family home, condos or the purchaser may want to live in the house. Either way, Arizona does have landlord-tenant laws that sellers and their agents need to understand.
#1 Selling A Property With a Lease in Place
If you are selling a property and the tenants have a lease in place, the new buyer legally needs to honor that lease. That includes the duration of the lease and the entire rental agreement. If there is a good lease in place, and the buyer is an investor this will work for everyone! If there is a lease and the buyer wants to owner occupy the property, the new owner can give the buyer an incentive to move, but can not break the lease. Arizona has a 48-hour landlord-tenant law that requires a tenant to have 48 hours for the property to be entered by the owner or a real estate agent. The tenant can provide a written exception to the 48 hrs rule.
#2 Selling a Property Without a Lease
If you are selling and the tenants are on a month to month lease, you only need to give a 30-day notice in Arizona. Homeowners would still need to follow the 48-hour notice for access to the property. Again, the tenant could give permission for less than 48 your notice.
Also, some owners will give a tenant a rent reduction in exchange for allowing the house to be shown with reasonable notice and keeping the home ins showing condition.
#3 Will the Tenants Vacate the house Before it goes On the Market
Some tenants will be happy to terminate their lease and move early. However, other tenants will not be happy the property is being sold. Other tenants may not care as long as the new owner honors their rental agreement. Typically, if you are looking for multi-family housing, the logical purchaser would be an investor who intends to honor the current leases. A single-family house, condo or townhouse could be purchased by an individual wanting to owner-occupy. In these cases, it would be best to have the property vacant.
#4 Check The Landscaping and Pool
If the tenants maintain the landscape and pool you may want to look at service to come in and ensure the yard and pool areas are in top condition. Take a good look at the property exterior. If the tenant has a dog, be sure they are picking up after the dog on a daily basis.
Nothing is more frustrating to a potential buyer than walking in your yard and stepping on “gifts” left behind by a dog.
#5 Can a landlord show your home while you still live there?
In Arizona, a landlord would have to follow the state’s Landlord-Tenant guidelines. Tenants must be given a 24 – 48-hour notice for entrance into the property. The tenant must still give permission for access into the property. When planning to sell a house, the landlord should communicate with the tenant. If the tenant is on a month to month lease, you may be better off waiting until the tenant has vacated the property. Keep in mind the tenant must still give permission for anyone to access the property. If your tenant is going to be resistant to having the property shown, wait until they move out. There is nothing that requires the tenant to maintain the house in showing condition like you would if you were showing your own home.
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#6 Offer to pay for a moving company
When renters are ready to move, they start to think of all the expenses they will pay to pay for. In addition to the moving expenses, tenants have to come up with the first month’s rent and security deposit. Also, they may also have to pay deposits for utilities. Look for ways to minimize the out of pocket expenses the tenant will encounter.
#7 Does the House Have To Be Available for Showings?
Some homeowners will put a house on the market and do not allow showings until there is a purchase contract in place. Few home buyers want to purchase a house sight unseen. After the house is under contract, the buyer is then able to do a home inspection.
Some buyers are not willing to place a contract on a house without seeing the inside of the property. Often sellers require this to avoid intruding on the renters.
#8 Offer Weekly Cleaning Services
If your current tenant has indicated it is difficult to keep the property clean for showings, offer a cleaning service. This will cost you a few dollars, but it may make your tenant more willing to have the property shown, and ensures you it shows well. Nothing is a turn off for buyers like dirty or stained bathrooms. A cleaning service can eliminate this. While it will still be up to your tenant to get the property picked up, you are assured it is clean. The cleaning service would likely appeal to the tenant and provide a nice perk for them.
While it is possible to sell a house with a tenant living in it, it certainly can be more difficult. Sellers need to consider the legal ramifications to the clients and be sure they adhere to the Arizona Landlord Tenant Act. It is also helpful for the landlord to offer the tenant a discount on their rent if they want the tenant to make the house available for showings. Tenants need some incentive to make the house accessible and in showing condition.
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