Expert: Hans Weber, Licensed Broker Associate - 8/21/2007

Question
My husband and I own an apartment condo that we have rented. However we are
in the process of evicting him because he has fallen very delinquent. We would
like to put it on the market ASAP but if the tenant pays on time we have to
allow him to stay. If he does end up paying and staying, what is the best way to
sell our property?

Answer
Hello Ama,

Thank you for your question.

Hopefully your tenant will catch up in the rent.  It is hard to evict tenants.  Have you seen the movie Pacific Heights?

Anyway, if you have a lease with the tenant, the lease is part of the property as long as the lease is in effect.  Meaning if you sell the condo and the lease is still in effect the tenant goes with the apartment to the new owner along with the deposit, security and any rent due.

You can sell the condo any time to any one with the tenant in place, but you will not have the same pool of buyers that you would have with an empty condo.. The buyers will be investors, much the same as a multifamily home buyer who is buying the property as an investment to collect rent.  In your case then the condo's value will not be the same as another empty condo just like it that a buyer could move in to on closing and live in it. Ask a Realtor what the difference in value is in your area.

You may want to talk to the tenant about finding them another place to live so you can sell.  Sometimes the owner will buy out the remainder of the lease.  How much time is left on the lease?  Maybe if you have 6 months left, make a deal with the tenant to leave in 3 months as long as they allow you to show the apartment for sale.  In exchange you will not collect the rent for these final 3 months?  You can try to work out any of many variations to make a deal with the tenant.

God luck.

Hans