So, you want to sell your Thunder Bay rental property? Fortunately, you’ve come to the right place! Throughout 2013 I had the opportunity to list multiple rental properties alongside my very experienced Co-Worker, Terry Budd. His many years in the Business of Real Estate in Thunder Bay, combined with his extensive knowledge in dealing with Tenants and the legalities involved in the sale of rental properties provided me with the opportunity to learn from one of the best! Together, we were awarded with a Top Team MLS award for 2013 from the Thunder Bay Real Estate Board for our joint work in selling investment properties.
Laying the Groundwork
Of course, one of the first things that you should do when you are thinking of listing your rental property for sale, is talk to your Tenants, and explain to them that you will be putting the property up for sale. Let them know what’s involved, that their privacy will be respected, and that we can all work successfully together. Tenants are people too, and they will appreciate understanding how things like the actual listing of the property, showings, notices, etc. will work. Explain to them that your Real Estate Agent will be contacting them to set up an appointment to view and list the property, and help them feel prepared. It’s going to come better from you then if they receive a random call from a Real Estate Agent that they weren’t expecting. Remember, we want their cooperation throughout this process, and providing them with information as to how the process works will go a long way in facilitating trust.
The For Sale Sign is up, Now What?
Once the property is listed, Tenants must be provided with a minimum of 24 hours notice before a showing can take place. Note: A Tenant can refuse a showing for Real Estate purposes. Yup, this is why it’s so important to lay the groundwork carefully. Of course, good Tenant/Landlord/Real Estate Agent relations are not always possible. From my experiences last year, about 25% of all Tenants will not cooperate on a regular basis, and of those, 1/3 will become known as ‘The Tenants from HELL‘.
Help! I’m Trying to Sell a Property Inhabited by The Tenants From Hell!
This is really tricky, and never good. What do you do if your Tenants are refusing showings? This kind of scenario makes for an absolutely difficult and challenging situation. It may not always be possible to overcome this type of situation, and there is no doubt that these types of Tenants can make your life a living nightmare. You can’t just evict them, and make the nightmare go away. Oh no, you must abide by the Landlord and Tenant Act. If they are not paying their rent, you can take them to the Landlord/Tenant Board and apply to evict them. However, these types of Tenants seem to know exactly the right time to pay their rents to avoid eviction.
What Might Work? (But may not be Legal)
Please don’t take this section as legal advice. This is just an example of what worked for us, in a Tenant from Hell situation. Interested parties could potentially submit an offer to purchase, and under the home inspection clause, gain access to the home and decide at that point if they want to move forward with the purchase. My understanding in this situation was that the Landlord can gain access to the rental property for an inspection, with the appropriate notice. Of course the Police had to be present to ensure that the Landlord, Buyer, and Home Inspector were provided with safe access. In this particular situation, the Buyer was satisfied that they wanted to complete the purchase, and the sale moved forward.
What if the Buyer does NOT want to Assume Tenants?
This is often the case. Unfortunately, the only way to NOT assume Tenants is when the Buyer intends to occupy the property themselves, or their immediate family does. Here’s what you need to know; when the offer to purchase comes in, it must have a clause to the effect that the Buyer and Seller agree to provide the appropriate notices to the Tenants, and that they Buyer agrees to sign an affidavit stating that they themselves or their immediate family will be occupying the property. You of course will want to check this with your Lawyer. There are many different scenario’s and Legislation is constantly changing.
When can a Buyer have Possession?
Possession cannot be immediate in a Tenant situation, if you are purchasing the property to live in it yourself. Notices must be served to Tenants on the day before the rents become due and payable, and 60 days notice is provided at that point. I always suggest that another week be added to that in order to allow time for clean up of the property and so that any damages can be repaired after the Tenants have vacated.