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Advice please - when to let tenant know about intention to sell?
We have a property that we manage from a distance - it is in Wellington and we are in Dunedin. We want to sell this property and are currently trying to get trades people through to do all the cosmetic work needed to improve its presentation ready to go to the market.
The tenant has been fantastic allowing us to get quotes and get the work started.
I want to tell her of our intention as she has been a good tenant but I also don't want to jeopardise her panic and putting a halt to the work we need to do.
In saying that I don't want her to get annoyed wiht us for not telling her until we are ready to go to market (hopefully around 1 months time).
Obviously we would be very considerate to her once on the market with insepction times, open homes etc and would offer her a reduced rent to compensate for this - we also really need the house tenanted as the cost of not having the incoming rent would be prohibitive for us - any suggestions on how to handle this would be greatly appreciated - do we tell her before work has started and risk the work being delayed or not done at all or tell once work is completed - we intend to go to the market a soon as it is completed?
thank you for any advice or experience people have around this
From the Residential Tenancies Act
And for future information -
Landlord to give notice to tenant of intention to sell
(1) If, at any time after entering into a tenancy agreement, the landlord puts the premises on the market for the purposes of sale or other disposition, the landlord shall forthwith give written notice of that fact to the tenant.
(2) When a landlord is offering residential premises as available for letting, the landlord shall inform prospective tenants if the premises are on the market for the purposes of sale or other disposition.
There are other subsections in Section 51 but these appeared the most relevant.
51 Termination by notice
(1) Subject to sections 52 and 53, the minimum period of notice required to be given by a landlord to terminate a tenancy shall be as follows:
(c) where the landlord has agreed to sell the premises and is required by that agreement to yield the premises to the purchaser with vacant possession, 42 days:
Patience is a virtue.
I do fully intend to let the tenant know as soon as we do go to the market in compliance wiht the tenancy Act. But is there a good way of doing this - we are not on market yet as the house needs maintance/cosmetic work to be done if we are to sell - but I just don't know whether I let her know that this is our intention or I wait until we are talking to agents to get apprasial etc. My fear is she may be difficult to get the work done - it seriously needs some remdial work.
I think the tenant would get suspicious when you start getting all the contractors through to do remedial work, so she'd probably twig that something was happening.
Have you considered selling the house as it is (no matter how good or bad?), taking a reduced price?? This way you won't have to pay out remedial work costs, the purchasers believes that they've got a better deal, the tenant isn't disturbed and you may get a quicker sale. Costs for remedial work are not cheap. Just something for you to consider.
Receiving a reduced rent is better than receiving no rent. However, once the tenant knows the house is on the market, she only has to give you three weeks written notice (that's for a Periodic Tenancy, allowance must also be given for mail delivery, about 3-4 working days). If she's on a Fixed Term Tenancy (FTT) you can sell the property with her in situ.
You may find that when you put the house on the market, she might just leave anyway. If that's the case, you'll just have to wear the cost of an empty house.
The tenant should give reasonable access to REA's (Real Estate Agents). What she considers reasonable and what you consider reasonable, are two different things.
Whereabouts is the property in Wellington?? South, North, East, West, Kapiti Coast?? There are some REA's that are easier (better?) to deal with than others and some of the forumites may be able to give you a name.
The real estate market is really slow at the moment, so be prepared to have the house on the market for some time.
Read this article.
Patience is a virtue.
That is quite useful information. Have thought about selling as is - and have decided to do the work - trying hard to keep to a budget however.
We are already up around 5K - so we need to be quite careful of course.
The house is in Ngaio - so if you know of any good REA that would be great :-)
I have spoken wiht one REA - that I was very impressed with - Grant Cederwall from Tommys. He is based in Wellington city - but does sell houses out in ngaio area.
We are ready to sell now and just want it sold quickly so trying to make it a presentable/attractive option to buyers - it is not really a property invesrtment - we originally bought it as our family home - so i doubt it will attract investors
This is not a good position to be in. The likelihood of the tenant moving is very high no matter what you do. If it were me I would tell the tenant ASAP about your intentions in the interest of fairness. I doubt she would become obstructive, but she very well may move out.
Originally Posted by enzedtaffy
You could reduce her rent a bit from the moment the work starts, and promise to reduce it more later if she stays. That may give her an incentive to stay.
Great answer - I feel more comfortable taking that angle - she has been a great tenant as well so keeping her there is definitely in our interest.
I like One's idea, is there a chance she would want to purchase the house off you?
just seen a similar situation in a central ak apartment
buyer bought off the plan with generous 2 years rental guarantee making it slightly cash flow -ve
meanwhile world economy tanks as does ak aprt market
after 2 years rental guarantee stops and rent drops, turning slightly cash flow -ve into strongly cash flow -ve
owner holds on for 2 years hoping things get better
so they put it on the market
agent says to sell it as "vacant possession" to increase possible buyer pool
rent is dropped further so tenants put up with open homes etc.
agent tells buyer it's not actually vacant but tenanted and tenants would like to stay on, but they can be given notice if vacant possession is required
buyer asks if tenants are willing to pay current market rates
tenants don't really want to
property manager wants to keep tenants so offers to move them within building
tenants give minimum notice with effect that apart will be empty for 2 weeks before settlement
and seller copes another blow
is it just me or has the property manager acted unethically here
they are putting the tenants interests ahead of the LL who is paying them?
have you defeated them?
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