Breaking The Lease
Dave explains how to negotiate with a tenant about selling the property.
QUESTION: Jackie and her husband have a rental property they want to sell in order to pay off their debt. It is currently rented and they have a clause in the lease that says they can only list the property within 30 days of the end of the renter’s lease. If they wait to sell the house, it will not be the best time to list. What can Jackie do morally, legally, and in the best interest of both parties?
ANSWER: Sit down with your tenant and tell them that you’re thinking about selling the property. Let them know that you realize your legal and moral obligation to honor the contract. Then explain that you’d like to offer them a deal – something like $75 off the rent each month for the remainder of the lease if they will allow you to list the property. As part of that deal, they will have to keep the house clean and accessible for showings.
You also need to negotiate an early buy-out so that you can break the lease because you can’t make them move. For example, tell them you’ll give them 30-day’s notice and one month’s rent to get out of the house early.
You can also tell them that if they want to buy, you’ll make them a great deal.
That’s it – just negotiate these 3 things, and you can list the property:
- A waiver of the clause that allows you to list the property.
- Accessibility and cleanliness.
- The cost of breaking the lease.