Utah landlords
Selling a rental with problem tenants in it.
Most landlords in this position believe they have to get the tenant out before they can sell. That belief costs months and thousands of dollars, and it is usually wrong.
You do not have to evict anyone before you sell
An investor buyer takes a property with the tenant still in it. That is normal for this kind of sale, not a concession. I buy occupied rentals, and the tenancy becomes my problem at closing rather than yours.
Which means you can stop, today, if you want to. No eviction filing, no court date, no waiting out a notice period while the mortgage is still due and the rent is not arriving.
Evicting first only makes sense if you intend to sell to someone who needs the house empty. If you are selling to me, it is money and months spent for no gain.
The rule that catches people out
Selling the house does not end the lease.
In most cases a sale does not cancel an existing tenancy. The buyer generally takes the property subject to whatever lease is in place, and inherits it on its existing terms. Selling is not a way to remove a tenant.
That matters in both directions. It is why a retail buyer who wants to move in usually will not touch an occupied property with eight months left on a fixed-term lease. And it is why an investor can buy it without any of that being a problem, because a paying tenant is the point rather than an obstacle.
Have your attorney confirm what your specific lease and situation allow before you rely on any of this. Leases vary, and so do the facts.
Useful to have to hand
- The lease, and whether it is fixed-term or month to month
- What rent is actually being paid, and what is owed
- The deposit amount and where it is held
- Any notices already served, or a case already filed
- When anyone was last inside the property
The showings problem
You cannot market a house properly through an uncooperative tenant. Access normally needs advance notice, and a tenant with no reason to help you sell has every reason to be unavailable, or to leave the place looking its worst on the day.
A sale that needs no showings sidesteps the whole problem. I do not need repeated access, and I do not need the tenant's cooperation to close.
What it is costing while you decide
A non-paying tenant is a bill, not just an annoyance.
The mortgage, the taxes and the insurance carry on regardless. If the rent stopped, you are funding somebody else's housing out of your own income, and every month of deciding adds to it.
Eviction has its own costs and its own timeline, and at the end of it you have an empty house that may then need repairs before anyone will finance it. That is two problems in sequence, each with its own bill.
Selling occupied removes both at once. Whether that is the right answer depends on the numbers, which is what I would rather show you than argue about.
A fair question
What happens to the tenant afterwards.
Landlords ask this, and the ones who ask are usually the ones who have been reasonable the whole way through and feel bad about how it ended.
The honest answer: I take on the tenancy on its existing terms, and the day to day is handled by a licensed property management company rather than by me personally. The tenant deals with professionals who do this for a living, not with a new owner learning on the job.
I am not going to promise you what happens long term, because that depends on the tenant and on the terms. What I can tell you is that nobody gets handled badly to make a deal work.
Also true if the damage is bad
Tenant damage is one of the more common reasons a rental ends up unsellable on the open market. Holes, missing fixtures, pets, smoke, and a deposit that covers a fraction of it.
I buy as-is, so none of it needs repairing first. See selling a house that needs work for how condition affects what a house is worth and who can buy it.
Questions
Answered plainly.
Do you need to inspect the inside before you make an offer?
I would rather see it, and normally that can be arranged with proper notice. Where access is genuinely impossible, tell me and we will work out what can be done. What I will not do is give you a number sight unseen and then reduce it later.
The tenant is months behind. Can I still sell?
Yes. Arrears are between you and the tenant and do not stop a sale. How any owed rent and the deposit are handled gets written into the contract, so nobody is guessing at closing.
I already started an eviction. Does that change things?
No, but tell me early, because an active case affects how the sale is structured and who is responsible for what. It is not a problem, it is just something we both need to be looking at.
What about the security deposit?
It normally transfers to the buyer at closing and is accounted for in the settlement, because the obligation to return it goes with the property. Your attorney or the title company will confirm how yours is handled.
I have several rentals I want out of. Can you take more than one?
Yes, and it is worth telling me up front rather than one at a time, because the answer on a group is sometimes different from the answer on each house separately.
Nothing on this page is legal advice. Landlord and tenant obligations, what a sale does to an existing lease, notice requirements, and the handling of deposits and arrears all depend on your lease and your circumstances. Please have your attorney review your situation and any contract before you sign it.
Send me the address and the lease, and I will tell you what it is worth occupied.
No eviction required first, and no fee to find out.