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by Mel Metts
The age old question that every landlord faces: When I'm ready to sell my property, what do I tell my tenants?
In my experience, what concerns the tenant most is: What's going to happen to me?
Specifically, this concern boils down to three questions:
1. Will my rent go up?
2. What happens to my lease?
3. Am I going to lose my security deposit?
As a seller, you really can't speak to question #1. You don't know what a buyer will do at a later date, but there are some assurances you can give your tenant right up front.
Here's a sample letter I've used to notify my own tenants that I'm selling. I can tell you it's worked very well; I've had no tenant uprisings, and they've all been cooperative about showing their units.
We have made a decision to sell our apartment building at 123 Camelot Avenue. This should have no effect on you, except that we will need to show the building, including your apartment, to potential buyers from time to time.
When the building is sold, your lease and security deposit will be transferred to the new owner, and business will go on as usual.
I will do my best to give you a day's notice for any showings. I know these showings are disruptive, and I thank you in advance for your cooperation.
The letter template is available to our clients in both English and Spanish.
I believe honesty is the best policy in most cases. By being truthful up front, the tenants won't feel so manipulated. My own tenants have been extremely cooperative about showing their units; buyers ask how I could get such nice tenants.
If you don't tell your tenants you're selling, you have to make up stories to explain why people are coming around to look at the property. Tenants figure it out very quickly! Then they wonder why you haven't been honest with them, and what else you're hiding.