Tenant debt and property sale

[Shawn Stiteler]

Hello, so I am selling my first rental. It is a duplex and I still have the two original tenants from when I purchased it. The one tenant has been behind since I purchased the property and has caught up a lot on her past rent (through Covid) and I have decided to put the property up for sale. My question is what happens to this dept (about $3,000) she still owes. I would like to know my options. I plan on waving it in exchange for her cooperation in keeping the place clean and available for showings. However, I’m not sure if I actually have any leverage other than just waving the dept when I sell. 

[Curtis Yoder]

You could create a note payable from the tenant to you that would survive the sell of the property. Definitely have your attorney write it up so it is completely enforceable. I would not forgive $3,000 for a tenant to keep the property clean for showing. Keeping the property clean is an expectation that should be in your lease. Remember, most investors understand that this is an investment property and many of them are dirty. I cannot count the number of properties I have bought that needed a dumpster dropped off the first day I owned it to clean it up! Good luck to you on the sale!