Buying a House with Tenants: What To Do If a Renter Refuses To Leave
February 28, 2022
Buying real estate is always a risk. You’re investing a lot of money into something that may or may not appreciate in the future. But when you buy a property with tenants, there is an increase in risk. You need to be aware of the risks when buying a house with tenants and make sure you’re protecting yourself from any legal implications.
What Happens When You Sell a Property With Existing Tenants?
In a fixed-term lease, renters have the right to stay in a property for an agreed period of time. Fixed-term leases are the most common type of lease that exists in real estate. Renters with this type of lease reserve the right to stay in the property until their lease expires, even if that’s through the sale of the property.
On a month-to-month lease, tenants have the right to stay in a property based on a contract that automatically renews every month. In most circumstances, whichever party is ending the month-to-month agreement must give the other party a notice to vacate whether it be the tenant or landlord, depending on the state.
Lastly, there are tenants who don’t have a written lease and are staying on the property through a verbal agreement. Verbal agreements don’t offer much protection for tenants, especially through the sale of a property. The legal requirements differ from state to state but generally, the landlord will give tenants that don’t have a written agreement notice of 60 days to vacate.
If The Tenant Does Not Vacate The Property
When the seller has a property on the market for sale, it is the responsibility of the seller to deliver a notice to the current tenants without a fixed-term lease to vacate the property. In most cases, the tenant must vacate the property within 30 to 60 days. However, what do you do if the tenants don’t leave in that time period?
If the tenants are legally required to vacate the property but are still in the property as the sale is finalized, then the new landlord will be put in a difficult position. The new landlord will need to start a new notice period to remove the tenant(s) from the premises.
Before taking any action, you should review the lease terms and understand the state laws regarding tenant rights. States can differ from emphasizing protection for the landlord or for the tenant so depending on the state, the new landlord might have to take a specific set of actions.
Lease agreements usually give the property owner the option to end the lease if the tenant violates any stipulations written in the lease. If you find any clause violated, you can serve the tenant with a notice to vacate.
Unfortunately, this still may not be enough to evict a tenant. Tenants may have an emotional connection to the place they have called home for a certain period of time and may choose to stay even if they are asked to leave. However, if they refuse to leave the premises, you’ll have no choice but to seek legal action from a lawyer.
Summing It Up
Buying a house with tenants can be stressful but it doesn’t have to be. It can actually be beneficial to buy a property with existing tenants in them. It can be an easy way to already begin making money and reduces the amount of time it would take to find renters. If the tenants are slow to pay rent or are legally required to vacate the premises, then buying a house with tenants can turn into a pressing situation.
However, it is the seller’s responsibility to evict tenants during the real estate transaction. Buyers can put contingencies in the purchasing contract that allows them to leave the deal if the seller can’t get the tenants to vacate the property and in some cases, it’s better to avoid these types of situations before you are even involved.
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Connie has over 7 years of experience as a real estate agent and broker in Anacortes, WA. She is known to provide the best service and advice to her clients about real estate. Get in touch with Connie by going to her profile.