Good morning Lori!
We have a dilemma and hope you can help. My elderly father-in-law recently went into cared for care due to persistent health problems. He owns a maisonette and has lived on one side while renting the other one. The current tenants have been on site for less than a year and have 5 months left for their lease. We are now trying to put the property on the market in the next month or two, as the new life situation of my father-in-law seems to be permanent and he needs the resources to pay for his care. He agrees and has given us permission to prepare his house for the market. We've already started with a few minor repairs and updates to the exterior and recently exchanged a few windows and carpets in its unit, but the tenant's side is a different story. We are not sure how to stage and sell the property while the tenants are still living there. I have only seen through the front door a few times. It looks very confusing and I fear that potential buyers will be deterred. The tenants are aware that we are planning a listing for sale by the owner, although we have not specified a timeframe. How can we show this property to potential buyers without causing legal problems or bad feelings?
Complex duplex in Arkansas
Dear Complex duplex customer, thank you very much for your question. Yes, I agree, selling a house with tenants can often be a bit more challenging. For my part, I can only give you one opinion, no legal advice. I know that tenant laws vary from state to state, although I believe that your father-in-law is still bound by this lease as long as the tenant is in a lease. While the house could be put on the market, tenants are not required to clean up for demonstrations, and you would probably need to let them know at least 24 hours in advance each time the house is shown.
In other words, and without knowing all the details, I would contact the tenants to see what they might be open to. Offering an early repurchase of their lease and perhaps offering to pay for their relocation costs could sweeten the pot and cause them to leave prematurely. And while this option would definitely feed into the money you want to save for your father-in-law's care, it may be the best idea if you really want to spend it.
The only benefit you have is that it is a duplex and the buyer may consider an existing tenant to be positive rather than negative. As a single-family home, this would likely limit the pool of potential buyers to investors and buyers with the patience to wait for the lease to expire. As a two-on-one, however, it could be just the right scenario for a buyer to look for! An investor would rather consider it as a "one-down" offer, and a potential buyer planning to occupy the space might have the idea of someone else making these monthly payments for their mortgage. In this case, it may be sufficient to stage and show your father-in-law's side.
Whatever you decide, I strongly suggest that you consult with a lawyer specializing in real estate sales in your area before moving on either side. If it were me, that would be the first place I would start.
I wish you and your father-in-law all the best! Hope it all goes well.
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