As a landlord, you may decide to sell a rental property for a variety of reasons -- your rental business might become unprofitable, you may have to move to a distant location that would make managing properties difficult or you might not want to be responsible for repairs and tenant complaints. Whether you have to tell a tenant before selling a rental property depends on where the property is located and the terms of the lease agreement.
Review your signed lease agreement with the tenant before putting the rental property on the market, particularly if you used a pre-printed agreement or hired an attorney to draft the agreement language. Your lease agreement may stipulate that you will notify the tenant a certain number of days before listing or selling the rental property. If the agreement contains such language, you will have to provide notice to prevent violating the terms of the lease.
Right of First Refusal
Check with a real estate attorney before listing the property for sale to determine if your state has a "right of first refusal" law that applies to residential tenants. A right of first refusal gives the tenant the option to purchase the property before you make it available to another potential buyer. For example, Florida law requires you to provide at least 90 days notice to a tenant who has occupied a rental unit for at least six months. In Florida, you must provide the tenant with a written offer, the purchase price and other purchase materials the tenant can use to determine whether to purchase the property. The tenant may elect to purchase the rental property within 45 days of delivery of the offer.
Although notifying a tenant before listing a rental property is only necessary under certain circumstances, failing to notify the tenant may create discord that makes it difficult to sell the property. The tenant may intentionally leave his rental unit in disarray to discourage potential buyers. He may also object to allowing prospective buyers to tour the rental unit. Notifying the tenant before listing the property may increase his willingness to cooperate.
Notifying the tenant before listing the property for sale may give you the opportunity to encourage additional cooperation by offering incentives to the tenant. Offering the tenant a rent rebate for her cooperation may encourage her to keep the rental unit tidy and make the property available for showings.