Selling Property Mid Lease : ezLandlordForms

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Katherine M

started a topic over 8 years ago

Hello, I am wanting to sell my rental property and my questions are following: My property is in Oregon, lease is up end of 10/31/2016 Do I have to pay if the renter chooses to end contract early? If the new buyer chooses to not honor the lease agreement, who is responsible for the break lease agreement? Do I have to transfer the escrow money to the new buyer and as well as the contract, and thus the new owner is/are responsible for returning any deposits to renter? thank you, -Kathy

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Richard W

said over 8 years ago

The new owner would be held responsible to honor the lease, however in this situation it is best to work together and draw up a mutual termination of lease so that the tenant can begin to look for another home and receive their deposit back with out penalty . Letting a tenant out on good terms will often help the ease of transition.

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Kelly H

said over 8 years ago

As per Richard's note above, the new buyer must honor the lease to 10/31/2016. Once the lease is coming to an end, the new owner and current tenant are able renegotiate new terms or can vacate if they do not come to an understanding. There is no requirement for the renter to move out before the end of the lease, even if you are selling. I would double check that your lease does have a clause that the lease will remain in force even if the property sells. I would be surprised if it didn't have that in there, but I'd rather be safe than sorry. Some investors prefer that the property is already occupied when purchasing. This can help them obtain financing, especially if they wish to keep it as a rental. Any refundable security deposit from the current tenant will transfer to the new buyer through escrow. As a result, they will be responsible to return any money back to the tenant upon their vacancy. A word of advice from personal experience: Even if the intention of the buyer is to occupy the unit, I would not ask your tenant to move out before the close of escrow. If the funding falls through, you will be left with an unwanted vacancy. Once they are the owner, they can make those decisions. Best of luck in your sale!

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Kelly H

said over 8 years ago

As per Richard's note above, the new buyer must honor the lease to 10/31/2016. Once the lease is coming to an end, the new owner and current tenant are able renegotiate new terms or can vacate if they do not come to an understanding. There is no requirement for the renter to move out before the end of the lease, even if you are selling. I would double check that your lease does have a clause that the lease will remain in force even if the property sells. I would be surprised if it didn't have that in there, but I'd rather be safe than sorry. Some investors prefer that the property is already occupied when purchasing. This can help them obtain financing, especially if they wish to keep it as a rental. Any refundable security deposit from the current tenant will transfer to the new buyer through escrow. As a result, they will be responsible to return any money back to the tenant upon their vacancy. A word of advice from personal experience: Even if the intention of the buyer is to occupy the unit, I would not ask your tenant to move out before the close of escrow. If the funding falls through, you will be left with an unwanted vacancy. Once they are the owner, they can make those decisions. Best of luck in your sale!