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Dealing with Nightmare Tenants During a Sale

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Imagine this scenario: You’ve had loud and irresponsible tenants occupy your rental over the past year. Now you’ve just found out you’re relocating for work, and want to sell your income property. But the tenants aren’t exactly making the process easy. They continuously fail on their promises to make the place look presentable during showings, they often block visits, and they make prospective buyers feel really uncomfortable during the walk through.

How do you handle the situation?

Firstly, the most important thing to understand is that there is no real and easy legal solution to this problem. The biggest misconception a landlord can have is that they are free to do whatever they please simply because of their ownership. Landlords have to abide to the Quebec housing laws and to respect the rights of their tenants- no matter how unpleasant or unaccommodating these tenants are.

Make sure you understand these rights and rules well before making any negotiations with your tenants.

Landlords do not have the right to evict their tenants before the end of their lease terms simply because they plan to sell. Listing your property on the market is not a valid reason for evicting a tenant, and your tenants will be sure to make things even harder for you if you try to give them the boot before you’re legally permitted to do so.

Buyers do have the right to notify the tenants of their plan to occupy the property, (thus requesting their eviction) as long as the notice is given after the act of sale has been complete.

For month to month rentals (any rental term between 1 and 6 months): buyers must give tenants one month notice of their plans to move into the property.

For longer rentals (6 months+): buyers must give tenants 6 months notice to occupy the property.

If a landlord wishes to repossess his or her own home in order to occupy it themselves, the legal notice delay stays the same: 1 month for 1-6 month rentals and 6 months for longer ones. Remember though, that if your tenants see their ex-home listed on the market for sale after you’ve evicted them on the claims of personal repossession, they may have legal recourse. So unless you truly plan on living in your unit, it’s better to let their rental term run out before selling, or to let the buyers handle the repossession notice.

In the meantime, the only way to address the issue is via written communication. That way you can trace when and if there has been communication. A tenant cannot block your showing (between 9 am and 9 pm) so long as you have given 24 hours notice. Make sure you give your tenant fair warning before showings, and confirm the day before as a reminder, if they have a history of failing to make themselves present (or to make the condo presentable) at the time of the visit. If the tenants fail to let you proceed with the showing more than 3 times, and you have email proof that you gave them the 24 hour notice on all occasions, you can take legal action and may be entitled to damages.

Another thing you can do is to warn the prospective buyers of your tenant problem prior to the visit. That way they’ll know that to expect when the apartment isn’t spic and span during the showing. It’s not the best solution, but at least they’ll be mentally prepared, rather than letting their surprise blind them from seeing past the mess.

Related: How to Host a Successful Open House >>

Lastly, this really is a case where prevention is better than cure. Proper screening will lead to less frustration later on- so make sure you complete the full and complete verification procedure before leasing out your unit!

  1. Don’t accept any tenant without a credit check. In this industry we’ve heard all the excuses and we can honestly say that in 99% of the cases a failure to produce proof of credit history will lead to trouble later on.
  2. Get a reference letter from a previous landlord, and follow up on it with a call. Unless the person has newly immigrated from a foreign country (in which case their hosting company will prevent a reference letter) they should be able to produce a reference, and a refusal to do so is a sure warning sign.
  3. Make sure all work references are valid. A tip- call the company switchboard rather than the direct number you’ve been given to get more information about the person’s employment, and check their LinkedIn accounts before proceeding.
  4.  In the case of students or the newly employed, make sure you insist on co-signatures from legal guardians or spouses to protect yourself against failures to pay rent.
  5. Be thorough in your contracts. Be sure to list all your rules and policies and to explain them carefully to your tenants before any agreement is signed. Have everything in writing signed by all parties- be smart and refrain from a handshake policy; you  have more at stake than the tenant does in your real estate relationship.

And last but certainly not least:
Be clear and transparent with your tenants about your future plans to sell. If you plan to list your home on the market before a tenant’s term will be concluded, make sure you let them know before they sign the rental agreement. Unpleasant surprises lead to unpleasant behavior. If the sale comes as an unexpected, last minute necessity, being honest with your tenants about your reasons for selling (in a face to face conversation) will doubtlessly lead to more of a positive, helpful reaction than sending them a curt and dismissive message. Remember that if they feel respected in the initial process, chances are they will respect your wishes later on.

 

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