The sale of a tenant-occupied property can pose several challenges in today’s high-paced market. 

Having an extra party to work with in a transaction can cause unwanted delays in your listing and lead to frustration from your sellers and their tenants. From arranging showing times to taking listing photos, the whole process becomes even more cumbersome than your standard listing.

Because of this, it is vital for REALTORS^® to be prepared for tenant-occupied listings and have the knowledge they need to ensure a smooth transaction.

The first step when listing a tenant-occupied property is knowing the tenant’s lease agreement with their landlord. Is the tenant in a fixed-term or periodic tenancy? Is there an end date, or will a notice need to be provided? Are you selling the property as tenant-occupied? Is there a lease agreement at all? These are important questions that must be asked of your seller before listing the property.

Reviewing the lease agreement and its end dates is critical as this will affect the possession date of a buyer or even the type of buyer, such as investors or landlords. Skipping over this step can lead to further issues down the road and may even result in a lawsuit if not properly handled.

Listing agents must obtain a copy of the current lease agreement from the Landlord or Property Manager and review it thoroughly.

Once the lease is obtained and reviewed with the seller, this would be a great time to contact the current tenants. The sale of a rental property can be difficult for tenants, and it is important to remember this in your interactions.

Tenants are facing high rental prices and low inventory levels, creating hardship for tenants looking for a new home. REALTORS^® have the opportunity to empathize and set expectations for the transaction to ensure a positive experience for the tenants.

When discussing showings with a tenant, it’s important to include their schedule and other factors that may impact the viewing of the property.

Ask questions about their availability, if they work from home, if they have pets, and if there are any medical conditions you should be aware of (e.g., compromised immune system, mobility issues, allergies, etc.).

In your discussions, you may discover the tenant is also looking for real estate services, and you may be able to assist them with these needs. Ensuring that a tenant is well informed and has been heard can go a long way in moving towards a successful sale.

A property manager may also manage the property you’re listing, and this is someone you will have several conversations with throughout a sale. Working with a property manager can be a vital tool that REALTORS^® can rely on when gathering important information about the property. Property managers will understand maintenance issues (past and present), tenant information, condo information, etc.

Property managers will also have extensive knowledge of the Residential Tenancies Act, which must be utilized if any questions or concerns arise during the transaction. It is strongly recommended that members understand the tenant’s rights when dealing with the sale of a tenanted property so they can effectively navigate when a problem arises.

We know our members want to deliver the best experience for their clients, so CREB^® has designed a listing with tenants starter kit to assist in navigating the preparations for listing a tenanted property.

The starter pack includes a handy checklist and resources to ensure that all your bases are covered before your listing becomes active! You will also find several links with resources and articles to help manage the seller and tenant relationship throughout the sale.

Click here or check out CREB^®Link to find the listing with tenants starter kit under the Education & Compliance tab titled Practice Toolkits.

Happy listing!