Asking a good tenant to move out for sale
Investor · Scottsdale, AZ · Member since 2017 · 9 posts · 0 votes
Hey BP,
I am looking to sell my property that is currently occupied by a tenant. He is a great guy, a single Dad, never been late on payments and has been very understanding about some not so great property management issues in the past. So I want to be sure he isn't put into a difficult position. When I approach him about selling the place I would like to have some sort of document for him to sign saying that he agrees to the terms of moving out and breaking his lease. I have been told that in cases like these incentifying the tenant with sums of money if they are able to move out by certain dates is a good way to go.
My question here is does anyone have any legal type documentation along these lines? (I have looked through the BP files, Problem is I dont really know what i'm looking for).
Lastly, Any strategies on how to approach this will be very appreciated.
Thank you!
You have no leg to stand on as far as being harsh if the place is trashed - because you just signed a new lease with this guy.
So, picture ending up in court and the judge asking you why you signed a new lease with some guy who trashed your house?
You need to put yourself in the shoes of this guy. If you were him, what would be the proper incentive to get you to move. Forget completely your own needs or agenda. Pretend you are the tenant.
If he's a single dad, I'm assuming that means schools and kids. Does he have custody? Moving at the beginning of the school year will cause stress for him and the kids - even if they don't change schools. They'll be dealing with new rooms and new transportation problems. This is a huge deal for a single parent and their kids.
So, if I was him, would I move for $200? Heck no. And if you tried to pull some strong-arm routine on me, I'd be googling my rights and maybe talking to a lawyer.
So, now, if you were that guy, what would you want in order to want to put yourself and your kids through all the hassle? And maybe there's an issue with him and the court as far as not changing addresses, too.
I think you should sit down with the guy and tell him what you'd like - that you're going through a divorce, etc., (which he's probably been through) and you are going to need to sell the house. So, what would it take for him to move out?
And heck, maybe he'll want to buy it. But, treat him with respect and ask him what he'd want. You may be surprised, and it may be easier than you expected.
But, if you go in their with some wimpy, insulting offer, then pull some threatening type behavior, it will not likely go easy for you. Remember, you are the one who needs a favor here. Treat him with respect and he may surprise you.
Justin, I would take a step back from the money here for a momentand look at both your and his needs then think about options.
your needs: to sell the house (due to unforseen circumstances)
get the highest possible price for the house
ensure flexibility and good condition
His needs: a place to live
residency for his daughter to go to school (?)
stay within a budget--he has not anticipated moving expenses, new rent or disruption
I'm working on the assumption that he has every right to stay given the lease--your language implied you think that might not be true. It almost certainly is and you will be starting on a very poor footing if you make that assumption.
You are asking him to give up his right to live in the appt. and putting those other needs at risk. Can you mitigate that?
I might do a little research in the neighborhood at comparable rental rates. Find something and offer to move him into it.
If I was the tenant and I wanted to help you I would be much more likely to work with you if you came to me and said " boy this sucks for me, I'd like your help. I have to sell, I can do it with you in it but its worse for me. Look at this nice place I found right near by I thought might work for you and your daughter? I'd be happy to pay your first and transfer your last months rent as well as your security deposit so you are not out of pocket." Sounds like you can vouch for him as a tenant so this might be your best bet at a quick and smooth solution. If it was me I'd expect you to pay moving expenses as well as a minimum.
By the way, he is not being a bad guy if he says "no I don't want to move" and to think of him that way will not help (not saying you are doing that, just warning). He has no obligation to adapt to your change in circumstances and every obligation not to disrupt his daughters life/time with him. And if you fight you lose, so you might as well keep it friendly. It might go a long way.
Oh, and agreed that seeing if he wishes to buy it at a "favored" price--perhaps just a part of the commission--is good tactics and in some states the law that you have to make the offer.
This has pretty much all been said, but here's my 2 cents:
If the lease is signed, you are bound by that contract (even if you just told him that you'd be renewing for 9 months but haven't put pen to paper you are still bound, legally). Feel free to talk to him and see what's going on in his life- he may be in a position to do you a favor by undoing the lease, he may not.
Why not post the condo in the BP marketplace and see if anyone here wants to take it off your hands tenant in situ? You'd probably save in commissions compared to an MLS sale, so it might be worth selling at a lower price than you could get on the open market.
Or, 9 months goes buy pretty quickly. You'd be on time to sell during the spring buying frenzy in 2018.
Have there been other recent sales in the complex?
Thank you to all that replied with helpful and insightful ideas. I just met with the Tenant and explained my situation and got to look around at the place (messy but not broken). We agreed to basically him looking to see if he could buy the place at market value (If he commits to buying at market value then i will probably cut him a deal since we are avoiding realtor fees). If he cannot purchase the place then he will begin looking for another place. We did not commit to timelines yet because he is still unsure of what will work due to kids starting school in a few weeks. I felt it was my responsibility to offer that i pay him one months rent for lease termination and to pay up to $500 for moving expenses (no money changed hands yet as no decision has been truly made yet). He will continue to pay rent as normal just to keep the books a little cleaner. I did specify that if this cannot be completed by the time we move which we are expecting to be end of this year, then there is no point and we will wait out his lease. I explained that a big issue with it is dealing with things remotely is not ideal to me but is possible and very much so is an option if need be, just not preferable.
As far as the negotiation went, I approached is as me asking him a favor to do this. I think it worked very well because he seemed very understanding.
Moral of this story - Some times things in life come up and you have to deal with some not so wonderful situations. As long as you approach it open minded and willing to listen be receptive and take others into consideration things will play out as well as one can ask in the circumstance.
Hopefully i remember to post the final update on how the entire process went but that may be a few months from now so good luck to me on remembering to do that...
Again, Thank you all very much for presenting me some options. It really did help me to discuss with him multiple ways to make this work for both of us.