If you want to sell a house with tenants in Florida, you can do so legally. However, because having tenants adds a new dimension to your home-selling process, you need to know Florida’s laws as well as the rights of tenants. This guide will help you navigate the legal side of selling a house with tenants and how to communicate with them for a smooth transition.
One convenient option is selling to a cash home buyer. At Florida Cash Home Buyers, we can buy your property “as-is” and honor the duration of the lease, speeding up the closing process and helping to minimize disruptions for you and your tenants alike. Learn more about how our process works and get a free, no-pressure offer by requesting a quote today.
A Landlord’s Options for Selling with Tenants
Although selling is always an option for you as a landlord, tenants have the right to rent the property until the lease ends, and new owners must honor the current lease until expiration.
When navigating your options for selling with tenants, keep in mind your lease type so that you understand how long tenants have the right to remain in the property and so that you provide the required amount of notice to them.
- For a yearly lease that has no specific term, you must provide your tenant with a 60-day notice to vacate.
- For a month-to-month lease, the requirement is 15 days before the end of the monthly period.
Review the Florida Residential Landlord Tenant Act to understand your rights and responsibilities.
With that in mind, these are your options for selling a house with tenants in Florida.
1. Offer Financial Incentive
If you need your property vacated for sale or would prefer to avoid the lengthy eviction process, you can offer a “cash for keys” agreement to your tenant. This is when you, the landlord, offer financial compensation for the tenant to move out before the end of the lease.
Though tenants are not required to accept your offer, you both could benefit from a quick and smooth transition. When you’re needing to deal with an eviction, this can also create an empathetic approach that encourages cooperation and helps the tenants maintain their dignity.
2. Sell to a Buyer Who Will Take Possession Once the Lease Expires
Finding a buyer who is not necessarily in a rush to move can be helpful as well. This option allows for the tenant to complete their existing lease with the buyer moving in after the lease expires. The buyer would need to agree to honor the existing lease and the tenant would need to agree to move at the end of their lease. This option works well if you and the buyer are not in a rush.
3. Sell to An Investor
Investors oftentimes see tenant-occupied properties as a source of immediate income, which creates a good selling point. Buying a home with tenants is probably not a new endeavor for investors, which is a win-win for all involved. This not only makes your property a long-term asset for the investor, but also makes the selling process smoother for tenants and for you. The appeal for investors increases with how responsible your current tenants are. Those who consistently make timely rent payments can strengthen the selling point to investors.
4. Wait to Sell Until the Lease Expires
If you are not in a rush to sell, waiting until the expiration of the lease can help you avoid complications and delays with the sale. This gives you the opportunity to clean, make any repairs and stage the home before showing it to potential buyers.
Waiting until the lease expires also eliminates the need to coordinate with the tenant’s schedule for showing times as well as opens up your property to more buyers. This can help get the best price for your property and negotiate more easily with buyers.
5. Provide a Notice of Nonrenewal for Month-to-Month Tenants
In Florida, month-to-month leases require at least 15 days’ written notice of nonrenewal to legally end the tenant’s lease. Doing this gives you quick possession of the property allowing you to move forward with the sale of your property without tenants. It is important in this instance to know and follow local laws to deliver proper notice and to avoid any legal issues.
When You Can Legally Evict a Tenant
State laws in Florida outline specific legal grounds by which you can legally evict a tenant. In this section, we will cover different scenarios that would allow you to terminate tenancy or evict a tenant. Getting legal advice for how to navigate each situation ensures you comply with the law and remember that the eviction process can be lengthy.
- The tenant fails to pay rent. According to Florida Statute §83.56(3), if your tenant fails to pay rent when due, you can deliver a three-day notice for demand of payment in written form. If the delinquent tenant fails to pay within three days, you can terminate the rental agreement and move forward with eviction.
- The tenant violates lease terms. Following Florida Statute §83.56(2)(b), if your tenant is found in violation of the rental agreement you may provide them with a seven-day notice to fix the issue. This would include but not be limited to unauthorized pets, guests or vehicles; failure to keep the property clean and sanitary, and so on. In cases where noncompliance is an issue and the tenant should not be given an opportunity to fix such as destruction, damage or misuse of property, you can issue a seven-day notice to vacate. Both of these options require you to send a written notice with a clear description of the noncompliance.
- The tenant has repeatedly violated lease terms. Under Florida Statute §83.5(2)(a), if the tenant has violated the lease within 12 months of a written warning of a similar violation, you can serve them with a seven-day written notice of lease termination.
- The tenant is involved in illegal activity. According to Florida Statute §83.56(2)(b), if your property is being used by the tenant for any illegal activity, you can terminate your lease with a 7-day notice and file for eviction. This would be noncompliance which the tenant should not be given an opportunity to rectify and you can move forward with written notice.
- The tenant remains in the property after the lease is up. Florida Statute §83.58, if you have a tenant who remains in the property after the expiration of the rental agreement without your permission, you can file for eviction.
How and When to Notify Tenants of Intent to Sell
Written notices are vital for you as the landlord. They help you keep a clear record and avoid misunderstandings. To create a smooth process, follow these best practices for notifying tenants that you intend to sell.
Use professional and respectful language. Explain your intentions and how this sale will affect their lease while assuring their rights will be respected throughout the process. Maintain open communication and address any concerns they may have about the lease and how and when you plan to conduct showings.
Be sure your notice to vacate includes the following:
- Date
- Tenant’s name and address
- Your name and contact information as the landlord
- Reason for the notice
- Move out date
- Expected timeline for the sale process
- Information about showings, open houses and tenant’s rights
- Contractual duty reminders
It is important in these instances to have a record of your notice delivery. You may choose to drop the notice off personally, but can also send the notice via certified mail giving you receipt of delivery.
The appropriate notice period is dependent upon the type of lease that you have.
If the lease has a specific duration, it should state the required notice period which can’t be less than 30 days or more than 60 days.
If the lease doesn’t have a specific duration, also referred to as tenancy without a specific term, the landlord can terminate the lease by giving notice as outlined in Florida Statutes, Section 83.57:
- Year-to-year: You must give no less than 60 days’ notice before the end of the yearly period.
- Quarter-to-quarter: This lease requires you to give no less than 30 days’ notice prior to the quarter.
- Month-to-month: You must give notice no less than 30 days before the end of the month.
- Week-to-week: A week-to-week lease requires no less than 7 days’ notice prior to the end of the weekly period.
Going with a cash buyer like Florida Cash Home Buyers is a great option if you are selling with tenants. With cash offers, we can close quickly and we understand all of the ins and outs of buying tenant-occupied properties. Contact us today for a free quote!
Tenant Rights When Landlord Sells a Property in Florida
Your tenant has legal rights even while you’re preparing to sell a property in Florida they are living in. Note that selling the property does not terminate a tenancy, so as the property owner, you must give proper advance notice of things related to the sale, honor the lease terms and, if necessary, transfer the rent properly to the new owner.
If you understand the following obligations, you can avoid legal problems and ensure a smooth sale:
- Right to continue the lease: If you have a fixed-term lease, the existing lease terms must be honored by the new owner until the expiration of the lease. The exception would be if the lease includes an early termination clause or a clause regarding a “lease termination due to sale.” This clause would take precedence and possibly allow for you to give just 30 days’ notice to your tenant. However, it is not a common clause. If the lease is month-to-month, the new owner can terminate the lease with 15 days’ notice.
- Right to receive notice of sale: According to Florida law, you must deliver all notices in writing whether by hand or mail. While not required, if you keep copies of all correspondence and have documentation of delivery, you can better prevent potential disputes and provide clear communication.
- Right to privacy: To protect the privacy of tenants, give them a reasonable notice before you need to enter the property. You must provide your tenants with a minimum of 12 hours’ notice before a showing and work to agree on a specific time in an effort to respect their privacy. It is important to remember that giving personal information about the existing tenants to the prospective buyer is also a violation of their privacy.
- Right to refuse entry: As previously stated, it is your responsibility as the landlord to give notice of showings beforehand. If you fail to do so, your tenant can refuse entry. To respect tenant rights and avoid conflict, it is important to be familiar with legal requirements for notices.
- Right to a looked-after space: You are required as the landlord to maintain all repairs and provide good property management throughout the lease and up to the sale of the property.
- Right to purchase the property: If your tenant holds a right of first refusal (ROFR), this would allow them the opportunity to purchase the property from you before you accept an outside offer. This must be negotiated either in the lease agreement or by a separate document. If your tenant has a ROFR you will want to review it with an attorney to make sure you are not violating any terms before selling to another buyer.
Pros and Cons of Selling a Tenanted Property
When considering selling your tenanted property, it is important to understand the pros and cons. While a tenanted property can be a great option for an investor, it can also be difficult to coordinate and ensure cleanliness of the property during showings. So these sections help you make an informed decision.
Selling with Tenants in Place
Pros of selling with tenants in place:
- Steady rental income: Knowing that you still have a steady flow of income from the property up until the sale can be a definite positive.
- Attracts investors: Investment properties with established tenants can be attractive to investors as they will see immediate income in their purchase. Many are familiar with the laws surrounding tenant rights and are able and willing to work with existing lease terms.
- Attract cash home buyers: Cash home buyers like us are often interested in tenanted properties. We often purchase properties as-is and honor existing lease terms.
Cons of selling with tenants in place:
- Limited buyer pool: Since most first-time buyers and owner-occupied buyers will not want to deal with tenants, you will most likely have a reduced number of potential buyers. This is one reason a cash buyer can be a great option.
- Can’t guarantee the space will be ready for showings: Tenants may not have the same expectations of cleanliness in keeping the property “show-ready”. This can make a big difference for buyers. Though you may offer professional cleaning or maintenance services during this time, this can be an additional and unwanted cost for you.
- Harder to coordinate showings: With tenants in place, you add another person to the mix with whom you have to coordinate schedules. You not only have to communicate about showings, but you also have to make the times work for your tenant. In addition, you have to rely on them to keep the property presentable.
- Capital gains tax might apply: When selling a rental property, capital gains tax may apply if you sell it for more than the original purchase price. There are many factors taken into account such as, how long you have owned the property, your income, tax deductions and credits you may be eligible for. So plan properly to minimize these taxes.
Selling After Tenants Move Out
Pros of selling after tenants move out:
- Easier to coordinate showings and maintenance: When you choose to sell after tenants have moved out, you can take the proper time needed to deal with any maintenance or upkeep easily. It also makes scheduling showings and open houses more convenient.
- Wider buyer pool: You can sell to a plethora of buyers. First-time buyers and those who plan to live in the purchased home (often referred to as traditional buyers) as well as real estate investors can all be a part of your buyer pool.
Cons of selling after tenants move out:
- Loss of rental income: Without tenants, any incidentals that come up during the selling process must be paid for out of pocket and without the help of the additional income from a tenant.
- Longer sale time: This could also delay the sale of your home as you may need to wait until a lease expires.
Types of Buyers for Rental Properties
Each type of buyer has its own set of advantages and considerations. Understanding the buyers you are working with will give you insight on how to ensure the sale of your property goes smoothly.
- Cash buyer or investor: A cash buyer is someone who can purchase a property without any outside financing. Cash buyers can usually close quickly and can buy as-is. One thing to consider is that cash buyers often offer less than market value (around 20% less) as they factor in any repairs and maintenance needed.
- Traditional buyer: Traditional buyers are usually looking for a move-in ready home to live in long term. They’re most likely going to be working with a real estate agent who can set an appropriate asking price, and will handle negotiations and paperwork to help simplify the process for the buyers.
- Current tenants: If interested, selling to your tenant can help to save time and money. There are also options such as lease-to-own or seller financing that could provide more flexibility in the sale.
Making the Right Decision for You
What are your personal financial goals in selling your property? What type of buyers would you like to attract? These are great questions to ask as you decide to sell your property with tenants.
This section can be used as a guide to help you evaluate your options, understand all of the legal implications and make your best choice as you take into consideration your specific circumstances.
- Evaluate your goals. Consider the best option for your current situation. Do you want a quick sale? Do you prefer the maximum number of prospective buyers? Do you need the rental income during the sale? All of these are important factors in considering your options.
- Assess market conditions. Look at and consider the current market. For instance, is it a buyer’s or seller’s market? This could help you determine whether to sell now or wait until tenants vacate.
- Be mindful of the buyer pool. When trying to decide to sell your tenanted property or wait until the end of the current lease, it is best to consider the buyer pool in your area and in the current market.
- Review legal considerations. It is important to ensure a full understanding of your obligations as a landlord. From following the lease terms to observing tenant rights, letting the law direct your decision-making will help avoid any legal complications.
- Consider the likelihood of tenant cooperation. If you are selling with tenants in your home, you will need their cooperation. Consider your current tenants and see if they would be a positive or negative influence on the sale of the property. If you have other rental properties available, you may consider offering that vacancy to your tenant. If not, you could refer them to other trusted landlords to help them find a new home.
If you want to sell your house in Florida but selling a property with a tenant seems too stressful to navigate, we recommend working with Florida Cash Home Buyers. We are experts in buying properties through cash offers all around the Florida area and love to help find solutions for people like you with tenants and many other situations sellers may be facing.
Get an Offer For Your Rental Property Today
Ensuring you have a smooth and successful closing requires clear communication, an understanding of landlord responsibilities and tenant rights as well as choosing the best route for you as a seller.
Selling to a cash buyer like Florida Cash Home Buyers is ideal for tenant-occupied properties as we offer a faster, hassle-free closing and accept your property “as-is,” minimizing disruptions for tenants. Request a quote today.