Praful Thakkar, Andover, MA: Andover Luxury Homes For Sale (LAER Realty Partners)

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Rainmaker
718,113
Candice A. Donofrio
Next Wave RE Investments LLC Bullhead City AZ Commercial RE Broker - Fort Mohave, AZ
928-201-4BHC (4242) call/text

This is not really a complicated situation. The tenant holds a leasehold estate during the term of the lease. So the property must be sold subject to terms of the lease. Or wait until the lease is up, give the tenant notice, remove the tenant and then list the property vacant.
OR, I suppose the landlord could attempt to buy the tenant out of the lease. That could be pretty pricey for the landlord as opposed to waiting. I have friends in rent controlled rentals in LA with new owners offering them five-figure buyouts to get them gone.

Nov 11, 2017 08:07 AM
Rainmaker
1,027,000
Susan Haughton
Long and Foster REALTORS (703) 470-4545 - Alexandria, VA
Susan & Mindy Team...Honesty. Integrity. Results.

In our area, you can sell subject to the lease, of course, if you can find someone okay with that.  

There is always the option of talking to the tenant to see if they want to vacate and if they are not opposed, offer to pick up the tab for the move or some other kind of incentive. 

 

Nov 11, 2017 08:15 AM
Rainer
116,785
Christine Kankowski North SD and Temecula
House Match Inc - Poway, CA
Excellent Sales and Property Management

The lease stays in place. Make sure the seller discloses the lease immediately. 

This happens routinely when an investor sells to another investor. 

In CAlif, there is a form called tenant in Place addendum. 

Nov 11, 2017 08:05 AM
Rainmaker
1,246,307
Ryan Huggins - Thousand Oaks, CA
https://HugginsHomes.com - Thousand Oaks, CA
Residential Real Estate and Investment Properties

In CA the condo would need to be sold with the tenant in it.  Tenant will have the right to stay for the remainder of his/her lease.  If the landlord wants the tenant gone to make the sale more feasible, then their best bet would be to approach them and offer financial incentive to vacate.

 

Typically in CA we see in the comments "Property is tenant occupied.  Tennant lease is through MONTH/YEAR.  New owner to honor existing lease."

Nov 11, 2017 09:17 AM
Ambassador
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Debe Maxwell, CRS
www.iCharlotteHomes.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
Charlotte Homes for Sale - Charlotte Neighborhoods

Here in NC & SC, we see that all the time - the property is sold, subject to the terms of the lease and the lease is transferred to the new buyer. Good luck, Praful!

Nov 11, 2017 08:46 AM
Rainmaker
1,078,495
Anthony Acosta - ALLATLANTACONDOS.COM
Harry Norman, REALTORS® - Atlanta, GA
Associate Broker

Compensate the tenant for any inconvenience.  

Nov 11, 2017 08:23 AM
Rainmaker
932,055
Thomas J. Nelson, Realtor, ePRO, CRS, RCS-D
Big Block Realty 858.232.8722 - La Jolla, CA
& Host of Postcards From Success Podcast

Simple: the new owner needs to honor the lease. I sell tenant occupied properties all the time. You have a smaller buyer pool, but it can be done.

It's not tricky Praful Thakkar when done by the book. Also, you can offer "cash for keys" to the tenant as an incentive to break the lease.

Nov 11, 2017 08:59 AM
Rainmaker
3,297,586
Wayne Martin
Wayne M Martin - Chicago, IL
Real Estate Broker - Retired

What does the lease say? Does he have a right to show the unit to a prospective purchaser?

He can wait the lease out and prepare the unit for sale. He can offer to pay the tenant for each showing. He can buy the tenant out. The tenant may want to stay and let the landlord show the unit subject to a longer lease term.

There are choices!

Nov 11, 2017 08:35 AM
Rainmaker
1,329,087
Carol Williams
Although I'm retired, I love sharing my knowledge and learning from other real estate industry professionals. - Wenatchee, WA
Retired Agent / Broker / Property Manager

Easy peasy.  Sale is subject to the terms and conditions of the lease.  Many investors prefer this.  If the buyer wants to take occupancy, then the tenant should be offered monetary incentive to leave.  The tenant holds the cards, so it's all about what you can negotiate with them.  

Nov 11, 2017 08:32 AM
Rainmaker
5,031,938
Barbara Todaro
RE/MAX Executive Realty - Franklin, MA
Marketing Agent for The Todaro Team

the lease runs with the sale.... the listing needs to reflect the fact that the lease exists.... the future buyer owns the lease...

Nov 11, 2017 08:25 AM
Rainmaker
375,864
Susie Kay
Ultima Real Estate - Plano, TX
North Dallas Specialist

In Texas you can sell your property with tenant.  In other words, the tenant comes with it until the lease expires.  This can be appealing to future investor buyer but will eliminate buyers who want to live in the property.  When does the lease expire?  If it's expiring in a month than seller can choose to wait. I've seen some sellers compensating their tenants to move out so they can sell vacant homes.

Nov 11, 2017 12:45 PM
Rainmaker
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Lyn Sims
RE/MAX Suburban - Schaumburg, IL
Schaumburg IL Real Estate

Nothing. He sells the tenant & the lease in a bundle to a new landlord OR the lease expires & gets a new buyer.

Nov 11, 2017 11:02 AM
Rainmaker
212,540
Dennis Swartz
Full Circle Property Management - Columbus, OH
MBA, GRI...experience counts!

You can sell with tenant in place, or see if you can work a buyout of the lease, or wish for them to stop paying.

Nov 11, 2017 10:55 AM
Rainmaker
1,523,605
Sybil Campbell
Long and Foster REALTORS® 5234 Monticello Ave Williamsburg, Virginia - Williamsburg, VA
REALTOR® ABR, SFR, SRES Williamsburg, Virginia

It depends on the landlord laws, rights or statutes in your state as well as what is in the lease.

Nov 11, 2017 10:37 AM
Rainmaker
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Roy Kelley
Realty Group Referrals - Gaithersburg, MD

Sell subject to the current lease. Comply with the lease provisions when showings are planned.

Nov 11, 2017 09:51 AM
Ambassador
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Fred Griffin, on leave of absence from ActiveRain
Fred Griffin Real Estate - Tallahassee, FL
Licensed Florida Real Estate Broker

Sell it subject to the lease... or, "cash for keys" to get the tenant out.

Nov 11, 2017 05:52 PM
Rainmaker
705,051
Richard Bazinet /MBA, CRS, ABR
West USA Realty - Scottsdale, AZ
Phoenix Scottsdale. Sellers, Buyers & Relocations

You received some great advice in the answers. It depends at which speed and how to sell the unit. For an owner-occupied buyer, seller buys out the lease (tries to), for an investor, there is nothing to do, keep the tenant in, that's what the investor wants...

Nov 11, 2017 02:22 PM
Rainmaker
361,130
Jill Murty, Realtor - Orange County, CA
PREA Realty - Laguna Niguel, CA

The seller and tenants can mutually agree to terminate the lease early.  This option would often include a perk to the tenants, such as a credit for a half a month rent after move out.

If the property is sold with the tenants in place, the new owner must accept the terms of the existing lease.

Nov 11, 2017 11:58 AM
Rainmaker
737,255
Olga Simoncelli
Veritas Prime, LLC dba Veritas Prime Real Estate - New Fairfield, CT
CONSULTANT, Real Estate Services & Risk Management

Read the lease to see if situation is covered, it might be. If not, consult an attorney as to what can be done legally. 

Nov 11, 2017 10:26 AM
Rainmaker
1,378,617
Michael Setunsky
Woodbridge, VA
Your Commercial Real Estate Link to Northern VA

Praful Thakkar The only option is to sell the condo while the lease is in effect. The only requirement is the lease stands. Whoever purchases the condo will have to honor the lease.

Nov 11, 2017 10:21 AM
Ambassador
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Joe Pryor
The Virtual Real Estate Team - Oklahoma City, OK
REALTOR® - Oklahoma Investment Properties

The lease if it were Oklahoma takes precedence so unless the landlord can buy the tenant off they stay.

Nov 11, 2017 10:08 AM
Rainmaker
2,463,314
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

Money talks...

Nov 11, 2017 09:47 AM
Rainmaker
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Donna Harris
Donna Homes, powered by JPAR - TexasRealEstateMediationServices.com - Austin, TX
Realtor,Mediator,Ombudsman,Property Tax Arbitrator

You market towards investors and coordinate with the tenant to allow showings.

Nov 11, 2017 09:39 AM
Rainmaker
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Ron and Alexandra Seigel
Napa Consultants - Carpinteria, CA
Luxury Real Estate Branding, Marketing & Strategy

Praful,

Candice A. Donofrio answered you perfectly!  A

Nov 11, 2017 09:35 AM
Rainmaker
1,021,048
Sam Shueh
(408) 425-1601 - San Jose, CA
mba, cdpe, reopro, pe

Contract stipulates the lease is transferrable to new owners with deposit going to the seller through escrow. A buyer needs to ractify the old contract.

Nov 11, 2017 09:16 AM
Rainer
150,992
Byron K . Jones
Coatesville, PA
List Today - Sold Tomorrow!

Thomas J Nelson....has the answer for you

Nov 11, 2017 09:12 AM
Rainmaker
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Nina Hollander
Coldwell Banker Residential Brokerage - Charlotte, NC
Your Charlotte/Ballantyne/Waxhaw/Fort Mill Realtor

Not quite sure what you are asking... are you asking if he can list the property or sell the property. He can sell subject to an existing lease. He can list pursuant to the terms of the lease agreement.... but at the end of the day, you really need to check the specific leasing agreements and laws in your jurisdiction.

Nov 12, 2017 04:19 AM
Rainmaker
846,015
Marco Giancola
Beachfront Realty - Miami Beach, FL
Realtor (305)608-1922, Miami Beach Florida

Not complicated and Candice A. Donofrio already explained it for me perfectly. The buyer must clearly know the property is tenant occupied and that he is becoming a landlord at closing unless the tenant leaves by whatever means. The lease withstands the purchase if tenant refuses to exit before closing.

Nov 12, 2017 04:08 AM
Rainmaker
1,039,798
Dave Martin (703) 585-4687
Fairfax Realty - Fairfax, VA
Making Realty Dreams a Reality #WeWillGetYouHome

Any sale would be subject to the terms of the lease.

If the landlord is selling to another investor then it would simply be a matter of notifying the tenant of the new owner. The terms of the current lease would apply to the new landlord.

If the buyer is to be an owner occupant.

  • They could delay settlement until the current lease has ended.
  • The buyer could become a temporary landlord under the terms of the current lease.
  • As Candice A. Donofrio mentions an attempt could be made to buy out the tenant.

There are a couple of other options depending on the situation of the lease, buyer, landlord and tenant.

Good Luck  :-Dave

Nov 11, 2017 07:56 PM
Ambassador
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Jeff Dowler, CRS
Solutions Real Estate - Carlsbad, CA
The Southern California Relocation Dude

The property would have to be sold with the tenant, and lease in place here in CA. Landlord could try to work out a financial deal with the tenant but that could get expensive. If a good tenant some potential landlords might be happy to purchase the home with the tenant in place, depending.

Nov 11, 2017 06:19 PM
Rainmaker
3,046,421
Richard Weeks
Dallas, TX
REALTOR®, Broker

The new owner must honor the existing lease.

Nov 11, 2017 06:11 PM
Rainmaker
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Mary Yonkers
Alan Kells School of Real Estate/Howard Hanna Real Estate - Erie, PA
Erie/PA Real Estate Instructor

looks like you have several excellent answers, Praful Thakkar 

Nov 11, 2017 05:49 PM
Rainmaker
572,067
Steve Higgins
RE/MAX Kelowna - Kelowna, BC

You have to follow your Tenancy Act. Here where I live there is nothing you can do unless the tenant is willing to work out an agreement with the landlord. Try offering the tenant a month of rent free to move. Here tenants have more rights than the owners!!

Nov 11, 2017 05:18 PM
Rainmaker
1,495,077
Inna Ivchenko
Barcode Properties - Encino, CA
Realtor® • Green • GRI • HAFA • PSC Calabasas CA

Here in SoCal, we see often the property for sale with the tenant, especially if it is an investment property. Tenant has to be notified about the sale 60 days in advance if they want to find another place. Otherwise, a new homeowner takes over the lease till it is over. 

Nov 11, 2017 03:36 PM
Rainmaker
407,931
Lynnea Miller
Bend Premier Real Estate - Bend, OR
Premier Real Estate Service in Central Oregon

The landlord owns the property.  The buyer purchases it with the lease in place and assumes the responsibility of the tenant - along with the security deposit and any prorations of the current rent.

Nov 11, 2017 03:16 PM
Ambassador
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Bob Crane
Woodland Management Service / Woodland Real Estate, Keller Williams Fox Cities - Stevens Point, WI
Forestland Experts! 715-204-9671

A common occurrence, here the lease goes to the new owner unless it says otherwise, if they want out of it then they must negotiate with the tenants.

Nov 11, 2017 01:08 PM
Rainmaker
749,100
Jeff Pearl
RE/MAX Distinctive / LIC in VA - Lovettsville, VA
Full Service Full Time Realtor

Buy out the lease. Work with tenants to come up with solution. Maybe give tenants 1 month free rent. Help them find another place. If buyer is an investor, they can assume the lease under it's current terms.

Nov 11, 2017 12:20 PM
Rainmaker
3,053,541
Tony and Suzanne Marriott, Associate Brokers
Haven Express @ Keller Williams Arizona Realty - Scottsdale, AZ
Serving Scottsdale, Phoenix and Maricopa County AZ

Candice A. Donofrio  nailed this one!

Nov 12, 2017 04:47 AM
Rainmaker
1,445,421
Kat Palmiotti
406-270-3667 (MT), 914-419-0270 (NY), Broker in NY with Grand Lux Realty and in MT with (coming soon!) - Kalispell, MT
The House Kat

If the lease is still active when the building is sold, the new owner needs to honor the lease. And that should be disclosed in the listing.

If the landlord can convince his tenant to leave early, then that could work also. If the tenant is agreeable, the landlord could waive any move-out early penalties, he could pay for the tenants moving costs, he could find them a new place, etc. The important thing is communication! I went to a showing one time of a multi-family home and the tenants had not been told the building was being sold, nor were they told we were coming to see the place. That was awkward.

Nov 12, 2017 02:50 AM
Ambassador
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Debbie Reynolds
Platinum Properties - Clarksville, TN
Your Dedicated Clarksville TN Real Estate Agent

The owner can offer to buy out the lease or sell it subject to the tenant's lease in place. Either one can work depending on the market demand or cooperation of the tenant.

Nov 11, 2017 04:55 PM
Rainmaker
576,879
Gloria Valvasori, Accredited Senior Agent
BETTER HOMES AND GARDENS REAL ESTATE SIGNATURE SERVICE - Mississauga, ON
REAL Experience | REAL Commitment | REAL Results!

He can sell the condo, but the new owners must agree to assume the tenant.  He cannot be evicted just because the landlord is selling... at least that is the way it works here.

Nov 11, 2017 03:54 PM
Rainmaker
525,554
Dave Halpern
Keller Williams Realty Louisville East (502) 664-7827 - Louisville, KY
Louisville Short Sale Expert

Pay the tenant to move

Nov 11, 2017 01:57 PM
Rainmaker
540,788
Sean Casey
Patterson-Schwartz Real Estate - Newark, DE
Greenville, Hockessin, Newark & Bear Homes

I'm not sure about other states, but our contract has a spot for whether it is subject or not subject to a lease.

Nov 12, 2017 03:28 PM
Rainmaker
1,548,055
Sandy Padula and Norm Padula, JD, GRI
HomeSmart Realty West & Geneva Financial, Llc. - Carlsbad, CA
Presence, Persistence & Perseverance

If the buyer wishes for the tenant to remain, no problem. If not, will the tenant allow a lease buyout? If not, the terms of the lease will need to be honored.

Nov 12, 2017 09:46 AM
Rainmaker
565,213
Nathan Gesner
American West Realty and Management - Cody, WY
Broker / Property Manager

The Landlord is allowed to sell it. However, they have to disclose the existing lease and that it transfers with the sale.

They should also be aware the tenant may not be cooperative with showings or otherwise sabotage the sale.

Nov 12, 2017 07:52 AM
Rainmaker
2,798,795
Kathleen Daniels
KD Realty - 408.972.1822 - San Jose, CA
San Jose Homes for Sale-Probate & Trust Specialist

What do the local rules on landlord tenant dictate?  What are the lease provisions for selling?  Generally speaking, and I do mean generally speaking, I am in agreement with Candice A. Donofrio 

Nov 12, 2017 06:33 AM
Rainmaker
4,797,386
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

It should be possible with the new buyer assuming the lease.

Nov 12, 2017 06:26 AM
Rainmaker
4,432,217
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

Check the lease terms and state laws

        

 

 

 

Nov 12, 2017 03:01 AM
Rainer
230,518
Mike Rock
Complete Design - Granite Bay, CA
Granite Bay Luxury New Construction...For Less

candice has it pretty right..its not that hard.. possibly also look to selling to the tenant

Nov 11, 2017 10:28 PM
Rainmaker
3,983,315
William Feela
WHISPERING PINES REALTY - North Branch, MN
Realtor, Whispering Pines Realty 651-674-5999 No.

The buyes need to see all contracts in place

Nov 11, 2017 10:02 PM
Rainmaker
469,394
Diana Dahlberg
1 Month Realty - Pleasant Prairie, WI
Real Estate in Kenosha, WI since 1994 262-308-3563

From my limited knowledge I believe the lease continues on to the New Owner -- Tenants have rights.  You cannot remove the agreement with the current owner when the ownership changes.

Nov 11, 2017 07:51 PM
Rainmaker
1,596,694
Evelina Tsigelnitskaya
SIB Realty - Sunny Isles Beach, FL
www.SIBRealty.org 305-931-6931

I do it all the time - selling with the tenants.

Nov 12, 2018 12:18 PM
Rainmaker
1,157,478
Valeria Mola
SIB Realty - Miami, Sunny Isles Beach - Sunny Isles Beach, FL
305-607-0709 SIB Realty

Wow, that is great question and something to learn from the answers. 

Nov 12, 2018 11:44 AM
Rainmaker
3,200,433
Will Hamm
Hamm Homes - Aurora, CO
"Where There's a Will, There's a Way!"

I hope he knows that the lease goes with the home.

 

Nov 14, 2017 01:51 PM
Rainmaker
4,102,950
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

The tenant comes with the deal, transfer the lease and deposit.

Nov 14, 2017 05:43 AM
Rainmaker
1,166,184
Jane Peters
Home Jane Realty - Los Angeles, CA
Los Angeles real estate concierge services

Just another point to consider. You should check with your state laws. Here in CA if the the tenant remains in the property even one day after the expiration of the lease they become a month-to-month tenant and the landlord has to give 60 days notice. Hopefully your tenant is at market rate.

Nov 12, 2017 11:37 AM
Rainmaker
3,018,855
Scott Godzyk
Godzyk Real Estate Services - Manchester, NH
One of the Manchester NH's area Leading Agents

First it depends in the lease, i say every lease should have a for sale.sold clause that ends the lease in event of a sale. It should also say that a tenant has to allow showings with a 24 or 48 hour notice. You should note that when selling any home with a tenant and the tenant risks having to move, the tenant oftens does things to wreck any potential sales.  

Nov 12, 2017 07:48 AM