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Selling A House with Tenants Attached

So you’ve made up your mind to sell your rental property? Perhaps you want to switch investment gears or want cold, hard cash to solve some problem. Whatever the reason for selling your house, the best part is that your decision is valid. You should never be afraid of selling your property, especially if it is for the better. After all, the real estate sector is one of the most lucrative markets out there, and as an investor, it’s all about making moolah.

That said, there is a difference between selling a vacant property and selling a house with tenants. In the former, the process is cut and dry. Simply list the property and sit back with a cup of coffee – the buyer will come. However, it’s a whole different thing when it comes to selling an occupied house. Here, you will need to consider the lease agreement to avoid legal problems with your tenants.

So how can you sell your house with a tenant in it? Keep reading to learn what to do while complying with Texas house selling laws.

Texas House Selling Laws

Texas House Selling Laws

Before looking for the best ways to sell a house, you should know what you need to disclose when selling a house in Texas. You’ll need to let your buyers know of the presence of a tenant and let your tenant know your intentions of selling the property.

The added tenancy may be a hindrance to selling your house because it limits the buyer to those who aren’t looking to live in the property themselves. However, it is still necessary to disclose this information. 

In most cases, the failure to disclose to both parties will come back to haunt you. To better understand how that can happen, consider this scenario. You sold a house with renters but did not inform the buyer that the property had tenants. The buyer finds out that the property is occupied after paying for it. That can reverse everything.

And while some buyers will be lenient enough to seek an out-of-court settlement with you, others will go the whole hog of launching a lawsuit against you. Either way, you have zero chances of winning the battle. Hence, it pays to be honest with the buyer right from the word go.

Similarly, not disclosing your selling intentions to your tenant is against the Renters Rights, which we will discuss below. 

That being said, there are companies that buy houses in Fort Worth and surrounding areas that purchase houses regardless of their condition. At Four19 Properties, we buy houses in Texas even if tenants continue to live in it.

Landlords Rights When Selling a Rental Property

As a landlord in Texas, you have certain rights, which no one can take away. But, of course, your property is your investment, and you can use it however you wish, as long as you’re not breaking any law.

For instance, you have the right to evict any defaulting tenant from your house. Simply give the renter a three-day notice before eviction. And, you also have the right to legally terminate the lease agreement with the tenant if they fail to meet their obligations as stated in the agreement.

Have a rental property with tenants and want to sell it? You still have rights. While selling your house with a tenant attached to it could be a somewhat complex endeavor, the fact that you have your rights should be nerve calmer in such circumstances.

Thankfully, Texas is one of those states with some really good laws in place to protect landlords like you. If you’re selling your house with renters in Texas, you’re entitled to, among others, the following rights.

The Right to Collect Rent

Having informed the tenants of the plans to sell your property doesn’t deny you the right to collect rent from them. The laws in Texas allow you to continue collecting rent until you close the sale. Once you’re done with the sale and the ownership of the property has switched hands, that’s when the tenants can now start paying rent to the new owner if the owner agreed to buy the property with renters in it.

The Right to Show the Property to Potential Buyers

Of course, most, if not all, buyers will want to have a look at the property or do a thorough inspection before splashing their hard-earned money. With tenants in the property, this can be a real hassle. That’s because some tenants may decide not to cooperate if they feel it will infringe on their rights.

As a landlord in Texas, the best part is that you have the right to show your property to interested buyers as long as you inform your tenants of the showing in advance. The law requires that you give your tenants a notice, stating clearly when the showing will occur.

The Right to Not to Renewing the Lease Agreement

If a lease agreement expires and you feel like you don’t want to renew, then your tenant has no legal right to compel you to do otherwise. Simply wait for the lease to expire and sell your house without getting involved in disputes with renters. That can be one of the best ways of dealing with stubborn tenants trying to oppose your house sale.

Renters Rights When Selling a Rental Property

As a landlord looking to sell your house, you need to understand that change of ownership doesn’t change the lease agreement terms. A lease agreement is an easement, meaning it “runs with the land.” In simpler terms, a lease agreement remains attached to the house even if the ownership of the house changes. Like in many states, lease agreements in Texas remain intact no matter how many times the property ownership is changed. 

So, as a new landlord, you have no right to kick out tenants or change the terms of the lease agreement at your whims. Here are the rights of renters you need to understand before selling your property in Texas.

  • The right to information (e.g., you should inform your tenants well beforehand that you’re selling the house)
  • The right to continue staying in the property under a new landlord
  • The right to relocation allowances (this acts as an incentive, especially where the tenant has to relocate because a buyer wants a vacant house)

It should be noted that most state laws don’t give tenants the right to terminate the lease agreement when the property is sold. However, if the new landlord breaches all or part of the lease terms, the tenant has the legal right to terminate the agreement.

How to Sell Your House with Tenants in It

Nothing should stand in your way once you have decided to sell your rental property with tenants in it. You can either sell the house to a willing tenant or proceed and sell it to someone else, as long as you don’t tamper with the existing tenancy agreement. Be sure to inform the tenants that you’re selling the house and prepare it for sale.

Sell to Your Tenants

The fact that they are tenants doesn’t mean they won’t consider the option of buying your property. So, before looking for a buyer, give your tenants the priority as potential buyers. You may be surprised that they were only waiting for you to initiate the conversation.

Inform the Tenants of Your Desire to Sell

Don’t ambush your tenants with a new landlord just because you own the property. Instead, let the tenants know in advance of your desire to sell the house. That will prepare them psychologically for new ownership. It will also give them enough time to consider terminating their lease agreement (if they want to).

Fix Minor Cosmetic Issues

Ensure that your house is in good condition by fixing any basic issues. It may include repainting the house, repairing any leakages, and thoroughly cleaning the entire compound. If not fixed, such issues can ruin an otherwise good business deal.

sell house on Texas to a cash home buyer

Sell to a Cash Home Buyer

If you want to sell your house fast, consider selling to a cash home buyer. There are many benefits of selling to cash home buyers, including saving money from renovations and saving time from buyer financing. Most importantly, you can turn your property into cash in your hands in as fast as 24 hours in some cases. 

Wrap Up

Selling your house with a tenant attached shouldn’t be a source of stress. Unfortunately, many people don’t get it right, and that’s why landlords find themselves on the receiving end of accusations. 

The best way to go about it is first to understand your rights (as a landlord) and your tenants’ rights. Knowing the rights of the buyer is also essential. Once you do that, selling your house with renters can be a hassle-free, smooth process that leaves every party happy.

Learn more about selling an occupied house. Get in touch with our consultants to help you learn how you can sell a rental property with a tenant attached: Sell my house fast in Dallas!

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