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What should I do if I have a tenant-occupied home for sale?

July 21, 2011
Josh Jerman

This scenario is far from uncommon; in fact, legions of sellers have experienced the challenge of showing a tenant-occupied home to prospective buyers. Of course, there are some advantages to having an occupied property, and better yet, it can be a selling point, as it gives buyers an idea of how it feels to live there—but only if it looks presentable.

But there can also be some considerable disadvantages. For instance, you will have little to no control over the condition of your home (i.e., staging and cleanliness), and allowing strangers to wander through bedrooms and peek in closets is certain to be an inconvenience for even the most gracious tenant.

And if your tenants are unhappy about your decision to sell, there could be some effort to sabotage the homebuying process—evidenced by an unkempt yard or dirty dishes piled up in the sink.

If you plan on showing a tenant-occupied property to prospective buyers, here are a few ways to mitigate any potential discomfort:

• Review the terms of your lease agreement and familiarize yourself with Hawai‘i’s Landlord-Tenant Code.

• Sit down with your tenant(s) and discuss the logistics of the situation. Let them know that they are part of the process, and you need their help.

• Determine the parameters. Does the tenant feel comfortable with a lockbox on the door? Or, would they prefer the home be shown “by appointment only?”

• Explain that you are required to give them 48 hours notice before showing the property; however, by providing some incentives (for example, a gift certificate for lunch or movie tickets), your tenant may agree to shorter notice.

• Request that they keep the property “staged” and clean, and if possible, offer to hire a house cleaner to ease the burden on your tenant.

The common denominator here is an open and honest conversation. By doing so, you’re more likely to reach a mutually beneficial situation—and ensure a smoother homebuying experience.

For more information about Hawai‘i’s Landlord-Tenant laws, visit http://hawaii.gov/dcca/ocp/landlord_tenant/ or http://portal.hud.gov:80/hudportal/HUD?src=/states/hawaii/renting/tenantrights.

 
 
 

 

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