Selling with tenants can be a little tricky, especially when yours have decided that they’re not going to let you show the home. Thankfully, here in Rhode Island, our landlord/tenant act (see 0:53 in the video above) is pretty straightforward on the matter of access; Title 34, Chapter 34-14, Section 26 states:
“A tenant shall not unreasonably withhold consent to the landlord to enter into the dwelling unit in order to inspect the premises, make necessary or agreed-upon repairs, decorations, alterations, or improvements, supply necessary or agreed services, or exhibit the dwelling unit to prospective or actual purchasers, mortgagees, tenants, workers, or contractors.”
The law is clear: Your tenant has no authority to bar you from showing your property. Oftentimes, I’ll hear sellers say that they don’t want to upset their tenants by showing the property. Remember, though, that tenants can’t break your lease without consequences, nor will they have a legal leg to stand on if they attempt to break it simply on grounds of you showing the property. Hopefully, the language in your lease reinforces this reality. The following is the language we at the Warner Realty Group use for our leases:
“Landlords, its agents and designated representatives shall have the right to enter the premises with 48 hours’ notice given by phone call or voicemail if phone is not answered, text message or written notice, to inspect the premises, make necessary or agreed-upon repairs, decorations, alterations, or improvements, supply necessary or agreed services, or exhibit the dwelling unit to prospective or actual purchasers, mortgagees, tenants, workers, or contractors.”
We’ve essentially copied the language from Title 34 but added clarification on what constitutes acceptable notice; we suggest using a similar structure or making sure that the agent with whom you’re working uses it. If you’re selling a multi-family property, the hope is that at least one of those units is about to become vacant should your buyer plan on buying owner-occupied. (They’ll be able to get a better loan rate if it’s an owner-occupied property).
Try not to lock in any potential buyer to your leases. For example, you may have a long-term tenant in your building who, for whatever reason, benefits from a falsely low rate—perhaps they’re a friend or family member, or maybe you’re just being a good citizen by accommodating their unique circumstance. That’s certainly nice of you, but don’t try to force the buyer of your property to continue your good works; if you lock that particular tenant into another year-long lease, you can potentially lose a buyer, especially if that lease is below market value.
Also, if your single-family home tenants are on a month-to-month agreement, don’t try to have them sign a lease at that point to help them out. If your goal is to capture the equity in your home, don’t make it harder for a buyer to own your property. If you eliminate the possibility of owner-occupied financing, then you’ve greatly reduced your buyer pool and made your objective as a seller that much more difficult.
For more tips like this, browse our blog at wrgri.com. If you have specific questions or just want some expert advice on a sticky situation, feel free to give our office a call or send us an email. We’re always here to help you navigate the nuances of real estate!