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  • Writer's pictureZiggurat Realestatecorp

Tips when selling a tenant-occupied home

A home that is currently occupied can be hard to sell. Thus, tenants can make or break a sale. You cannot simply evict them just because you plan to sell your property. You need to understand that you have to think of the welfare of current tenants, your home, and the home buyers.

In instances where the property has been sold or mortgaged to another owner, the new owner cannot evict the existing tenant(s) just because he is the new owner. The new owner still has to follow the provision in the Rent Control Act of 2009 (RA 9653) on evictions.

Grounds/reasons for eviction:

Aside from subletting without the owner’s consent, other valid reasons for eviction are as follows:

  • If the tenant fails to pay the required monthly rent for a total of three (3) months.

  • In cases where the landlord refuses to accept the payment, the tenant may deposit the payment by way of consignation to the appropriate court, or with the city treasurer, the local barangay chairman, or deposit the amount to the landlord’s bank account within one (1) month after the landlord’s refusal.

  • The tenant should also deposit the rent within ten (10) days of every current month afterward.

  • If the owner/lessor or his immediate family members have a legitimate need to use the unit. However, the following conditions also apply:

  1. Provided the rent for a definite period has expired. i.e. 1 month, if the rent is collected monthly or 3 months, if the rent is collected quarterly, etc.

  2. Provided the owner has given the tenant 3 months advance notice. This should give the tenant enough time to look for another place.

  3. The owner is not allowed to lease the unit to any third party for at least 1 year.

  • If the unit is the subject of an order of condemnation by appropriate authorities and the owner/lessor needs to do necessary repairs to make the property safe and livable. The following conditions apply for this:

  1. The evicted tenant should be given the first priority to rent the unit back after the repairs.

  2. If the landlord raises the rent, the new rate should be reasonably proportionate with the expenses incurred for the repair.

  3. But if the unit has been condemned or completely demolished instead, and a new building is built on the same site, the evicted tenant no longer needs to be given the first priority for renting the new building or any of the unit(s) therein.

  • Expiration of the lease/rental contract.

Penalties for violations:

Persons, whether natural or juridical, who are found to have violated any of the provisions of this Act will be subject to a fine of not less than ₱25,000 but not more than ₱50,000.00, or imprisonment of not less than one (1) month and one (1) day but not more than six (6) months, or both.

So here are 7 tips when selling a tenant-occupied home:

1. Talk to your tenants in-person

While it is easy to just send a letter to your tenants about your plan to sell your home, personally talking to them is a significant act of courtesy. Discuss why you need to put the property out in the market and ask for their cooperation during the process.

2. Wait for the contract to expire

It is not the best decision to ask your tenants to move out on a short notice. Let them know that you are selling your property and give them ample time to transfer. When they ask if they could extend the duration of their residency, think carefully how it could affect your sale.

3. Do not renew the contract

If you already have a sure buyer, do not extend the contract of the current tenants. Doing so might cause the client to just opt for a vacant home rather than an occupied one.

4. Hire a professional

To avoid legal troubles and the hassle of the selling process, you can opt to hire a real estate professional. Brokers understand how the industry runs. Thus, they can help you sell your home faster and easily without problems.

5. Sell the home to your tenants

You can ask your tenants if they would want to consider buying your home. If they have lived in it for quite a while, they might be interested in purchasing it. You can offer them the earliest opportunity to be the owner before you start posting ads about the property.

6. Help the tenants relocate

If the home buyer has scheduled a specific date of transfer, you can help your tenants move out. Move them into your other rentals if possible, or assist them in finding a new home. Relocation is a dreadful task; help lessen the stress of home searching.

7. Give incentives

Selling your home requires client visits and inspections. You need the help of the tenants to make the house accommodating. Typically, tenants do not keep a property in a ready-for-viewing condition. And yes, it is hard to sell a grubby home. You could suggest a break or a discount on the rent to entice them to cooperate.

It is a challenging task to sell an occupied property. Reduce the difficulty by creating a sales plan before you put it out in the market.

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