For Landlords: Selling your home when a tenant is occupying the premises.
In the last several years, many homeowners who were unsuccessful in selling their home at their desired asking price, opted to rent their home. This was a new arena for many. Being a landlord is not for the weak at heart. There is a good amount of work involved but in many instances it can be a profitable venture and also there can be some substantial tax advantages when the property is eventually sold. The property can be depreciated, but be careful there are certain holding periods and one should always speak to their accountant to make sure the timing is correct to reap the tax advantages.
When the time comes that the property owner lists the home on the real estate market, there must be good communication between the Homeowner and the Tenant regarding the Tenant vacating the premises. If the Buyer of the property is looking for an investment property, having a property with a rock solid rental history is key. However, if the Buyer is purchasing the home as his or her’s primary residence, the property must be vacated before the closing. This is when the situation gets tricky. The Seller wants to maximize on the rental income and does not want the property vacated until the Buyer has his/her mortgage commitment but that usually occurs days before the actually closing. The Seller/Landlord must give notice as required by the lease and if there is no lease than a minimum of 30 days. The last thing anyone wants to get involved with is an eviction proceeding. Communication is key between the Seller and the Tenant.
Attorney Felicia B. Watson
FeliciaWatson@sbcglobal.net