Dear MarketWatch,
My husband and I own a home in New York City, located in Staten Island. We’d like to sell it, but we have to give the current tenants until about the end of June to move. It’s a single-family, fully-detached home with a small fenced-in yard.
What should we do first? Should we put it on the market now, and tell the Realtor about the tenants’ need for a few months, or wait until about a month before they have to leave and put it up for sale then? We’ve never sold a house before and I’m not sure what the best course of action should be. Thank you.
Sincerely,
Leaving the Landlord Life
‘The Big Move’ is a MarketWatch column looking at the ins and outs of real estate, from navigating the search for a new home to applying for a mortgage.
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Dear Leaving,
It’s incredibly considerate of you to be looking out for your tenants’ needs as you consider going about selling the home.
If you have not done so already, you should let your tenants know of your intention to sell the home. It sounds as though they are not on a month-to-month arrangement, but if so you’ll need to give them at least 30 days’ notice before they need to leave the home. If it’s a standard lease agreement, you don’t have to give advanced notice — but doing so is not only the moral and ethical thing to do, but would be in your interest.
Maintaining a good relationship with them now will be critical. You’ll want to have easy access to the home so you can repair anything that needs repairing, let your real-estate agent examine the property to make sure that it’s in good condition if anyone wishes to tour it. And who’s to say, perhaps your tenants would be interested in buying the home themselves.
To be clear, your tenants don’t need to have vacated the home in order for you to sell. “It is not uncommon for landlords to want to sell their properties while their properties are still occupied by tenants,” New York-based law firm David A. Kaminsky & Associates noted in a blog post.
When a renter signs a lease, their agreement is with the property technically, not the owner. Another landlord would assume the lease by buying the home, and they would be bound to honor it.
“If a tenant occupying a fair market apartment signed a lease for his apartment that expires after his landlord sells his property, the new landlord must honor the terms of the lease originally agreed upon by the tenant and his previous landlord,” David A. Kaminsky & Associates wrote. “The new landlord cannot legally alter any terms of the lease until the lease expires.”
In a market like New York, with such a high share of rental units, I’d imagine there are many real-estate investors who might be interested in purchasing a rental property. That said, Staten Island is different in many ways from the city’s other boroughs, so this property in particular may not be as attractive to an investor as one with multiple units.
It sounds as though you’re already working with a Realtor — if not, you should start soliciting interest from different agents to find who you want to work with. They will be able to best advise you on whether or not to wait until your tenants’ lease is close to ending to list the home. If you’re expecting interest from people who wish to live in the home themselves, it might not be as appealing if their move in is delayed after closing.
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