Marketer · Philadelphia, PA · Member since 2014 · 6 posts · 1 vote
I have a tenant who told me that they are pretty far along in the process of buying a house and they would be settling on April 27. I restated what the lease said as far as breaking it and started my search for new tenants.
After finding a husband and wife who want to move in, but have not signed a lease yet, the original tenants told me that there was an issue with the sale (liens against the property) and no longer want to move out, but they are still trying to get the liens cleared up.
What would you do in this situation? I am fine with them paying the penalty and moving out, but don't want to keep going back and forth with them and any prospective tenants.
Even if your tenants are month-to-month, they are to late to give notice and move before the end of May, so they will be paying (at least) May's rent.
If you find new tenants for June 1, you are still covered. If your exiting tenants move into their new house in the next couple of weeks, then you may get a little time to spruce-up the unit before the new occupants arrive.
@Dan Dressler I've been on the other side of this situation before (twice), where I was renting and looking to buy a place. The first time we were renting month-to-month and put in our notice 30-days before our move-in date (we stayed in the apartment for a month after closing so we could do some work on the new place before moving in)
The latest time we were very up front with the PM that we were going to start looking for a house to purchase, and came up with an agreement that we would stay at least 6 months, then go month-to-month and keep the PM in the loop as to where we were with our search/purchase. We also stayed a month after closing to get our new house in order before the move. Though our PM knew it was coming so there were no surprises. This open line of communication was key to a good tenant/PM relationship.
Since you now know that they are actively looking you might want to set up something that will benefit both of you. They clearly won't want to move right before buying a place, and you don't want to be left with a vacating tenant on short notice. I'm not sure how long they have left on their lease, but having open communication with them will help ease your pain a bit. Tell them to let you know when an offer has been accepted, and check in with you on the progress. Once they're 30-days out from closing they should put in their official notice, and agree to pay any fees associated with breaking the lease. Keeping you in the loop instead of in the dark will be helpful, so maybe a slight incentive for them to do this is needed (maybe offer a discount on the lease breaking fees?)
@Dan Dressler in CO the default lease break requirement is that they are responsible for utilities and rent for the duration of the lease, but you are responsible for trying to mitigate your losses (i.e. find a new tenant).
In that situation I would not be actively searching for a new tenant for the exact reason that just happened to you. I would keep the communication going, and only AFTER they have closed start advertising and showing. You aren't paying the money after they move, they are. But you are wasting the time, and possibly losing good tenants because of the false alarms.
I do something a 'little different' than most. I have an 'escape clause' for my renters. The renter has to pay ONE months rent in advance, give a 60 day notice AND forfeit 100% of their deposit. It is in plain English (its own subsection) and so far has never been used. If it EVER was I would make out like a 'bandit'. My properties do not stay vacant more than a week or so. ;-)
We just went through this and we advertised a July 1 occupancy date after communicating with the exiting tenants about their closing date. But we were careful to put into the ad that we preferred new tenants who were somewhat flexible with the move-in date. We had two qualified applicants and went with the ones who were more flexible.