Buying or selling an occupied rental property Q&A

So, you are thinking of buying or selling a house where a tenant is occupying the home?

Here are some frequently asked questions and answers:

What happens if we close while a tenant is still in place?

If you buy a property with a lease in place you become the landlord. You will receive a credit on the closing statement for the tenant’s security deposit that you will be required to hold until the tenant vacates and return to the tenants after accounting for any tenant damage. You will want to be away or the laws pertaining to security deposit disbursement and legal time frames that must be met.

How will rent be handled? 

The closing agent will handle the pro-ration of rent and credit the buyer on the final closing statement. The credit will include the day of closing to the end of the month the rent covers and closing transpires.  

What if I do not want to become a landlord?

If you do not want to become a landlord and handle the security deposit reconciliation, you will need to schedule the closing date after the tenant’s lease end date. However, you may also communicate with the Sellers agent and see if you can negotiate a lease termination offering to pay the tenant (if needed) to vacate early.

How can I ensure the property is in the same condition as when we inspected and accepted the homes condition in the purchase agreement?

We highly recommend doing your due diligence and completing a walk-through prior to closing to verify the property is in the same condition as when you put the contract in. If it is not you may want to request the seller make the needed repairs and ask to delay closing until it is done.

 
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