You have a rental property, but you want to sell? What should you do?
1) Give the tenants the first opportunity to buy the property. It’s possible that they are interested and have the funds to do so, and they will appreciate if you ask.
2) Sell with the tenants there. This can be more difficult because we need to give the tenants 24 hours notice, and the tenants may want to stay. But at least you will be getting rent during that time. There may also be some people who are looking for a revenue property with tenants in it.
3) Sell when the tenants have left. This is much easier to do, however, you are not getting paid any rent during this period. However, the house will be more attractive to potential buyers.
If you want to sell your revenue property without tenants, be careful how you proceed and make sure that you follow the Landlord Tenant Act of Alberta. You cannot give the tenants 90 days notice however, if they are on a month-to-month lease, until you have an accepted offer to purchase on your property, with all conditions removed. You can also give your tenants 90 days notice if you or a family member wants to move into the property. You are legally able to raise the rent though if the rent hasn’t been raised in the past 12 months. In Alberta, there is no limit on how much a landlord can increase the rent but a landlord can only increase the rent after a year has passed from either the start of the tenancy or when the last rent increase was made.
If there is a fixed-term lease, the lease needs to be honoured until its end date, by both the current owner, and any new owner, (leases stay with the property, not the owner of the property).
If you have a fixed-term lease, and would like the tenants to leave early, you can always negotiate with them to end the lease early, (for example you could offer them a month of free rent). You could do something like sign a fixed-term two-month lease, at the cost of one month. If that is the difference between making a sale or not making a sale, it could be worthwhile. If you have had good tenants, you can offer to write them a letter of reference as wel
If you want to fix up your home before a sale, it can sometimes be very difficult to do with tenants in it.
Please check the landlord-tenant act for more details, and to verify the above information, as sometimes there are changes to the landlord-tenant act.
Many of the team members at viewlethbridge.com have revenue properties. We are happy to chat about the best way to proceed with selling. It really depends on the tenant situation, the rent you are getting, and your reasons for selling.
Do you have bad tenants? Check here for reasons why a tenant can be evicted.
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