Q: We are moving out of town for a job opportunity and have decided to sell our rental property. The lease still has six months to go. Do we need to wait until the tenant moves to be able to sell? If not, what do we do? — Yami
A: You can sell the property in the middle of the lease.
Besides dealing with a new landlord, the lease remains unchanged for the tenant. The new owner becomes the landlord, collects the same amount of rent, and has the same rights and responsibilities you did.
If you think your tenant may be interested in purchasing the property, you may want to let them make the first offer. If not, explain the process to them, letting them know their lease will remain unchanged and asking for their cooperation.
When showing the home, give your tenant plenty of advance notice and work with their schedule. While your tenant must reasonably cooperate with the process, they do not need to be available for showings day and night with little or no notice.
The landlord and tenant relationship continues as usual during the sales process. You will collect rent and make any repairs, and your tenant must continue to use the property appropriately.
Regarding the closing, your buyer will want to ensure there are no outstanding repairs and the rent is current. When preparing to close escrow, you will provide the closing attorney information about the lease and any advance rent and security you are holding. The current month’s rent will be prorated, and any advance rent and security deposit will be transferred to the new owner as part of the closing process.
The new owner takes over all of your responsibilities as the landlord, including dealing with the deposits at the end of the lease.
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