Selling Residential Rental Property

[Rule]

Hi,

I have a house that I am renting out. I am using a property management company to handle the rent payments, as I am living in another state.  I would like to approach the tenants and ask them if they would be interested in purchasing the house. If they don't want to then I don't want them to think I am going to put the house on the market and sell it out from underneath them.  They are welcome to stay as long as they like. I just want to know if they would be interested.  How do I go about handling the situation properly? Do I go through the property management company, or do I write a letter to the tenants directly.  I have never met my tenants face to face or had any direct contact with them.  Thank you.

[Burg]

Hi Renee,

I apologize profusely for the lateness of this response.  The All Experts system just notified me that I have two pending questions unanswered, and I do not have a record of having received either of them, one of which was yours.

I would first check my Management Agreement you signed with the property management company.  Many times, these companies might have a provision in their Agreement that if a Tenant purchases the property, the management company will be paid a fee out of the transaction.

You should also read the LEASE the management company signed with the Tenant for similar language.

If there is language in either of the above relating to the purchase of the property by the tenant, whatever that language states should be your benchmark and guide, so to speak, as to how you will handle this situation.

If there is NO language relating to a Tenant purchasing your property in either the Management Agreement or the actual Lease itself, you should be okay to call the Tenant directly and ask the question, being careful to stress that you will continue to lease to them for as long as they wish to stay.

If, after reading your Agreement and Lease referred to above, you still have questions, you probably should consult with an attorney for legal advice.  Since I have not seen any of your paperwork, I am making certain assumptions and giving you real estate advice on how you might handle your situation.

Good luck to you, and feel free to write again if you have additional questions.

Regards,

Elizabeth