Occupied property, part 2: Selling homes with a tenant
Sept. 4, 2017 – This article – second in a series of three – regards selling properties that may be subject to tenancies.
My first article offered advice to help Realtors when they first take on a listing. This article focuses on contract language and the required steps once respective parties arrive at an agreement.
Many calls to Florida Realtors Legal Hotline focus on tenant-occupied property, and the questions usually arise from a failure to understand the parties’ obligations and rights. The information below should help make the tenant-occupied-property transaction as smooth as possible.
What are the seller’s (aka landlord’s) obligations to the buyer when the property is sold subject to a tenancy?
For the purposes of this article, the language in the Florida Realtors/Florida Bar (FR/Bar) residential contract is analyzed. If you’re using the Florida Realtors Contract for Residential Sale and Purchase (CRSP) document, addendum W. Rentals should be attached to the contract to clarify the parties’ obligations with regards to rentals.
″ Paragraph 6 of the FR/Bar Contract
Paragraph 6 of the FR/Bar contract addresses occupancy and possession of the property at closing. It states that the seller shall deliver occupancy and possession of the property to the buyer free of tenants, occupants and future tenancies unless paragraph 6(b) is checked.
Therefore paragraph 6(b) should be checked if a tenant is in place or a future tenant expected.
This paragraph also clarifies that the seller will disclose the facts and terms of any third party (i.e., tenant) occupancy to the buyer in writing along with a copy of the lease(s) within five (5) days after the effective date. If the buyer does not like the terms of the occupancy, the buyer has an option to terminate the contract within five (5) days after receiving this information from the seller.
So what does this mean? As a listing agent selling property subject to a tenancy, you should make sure the seller has access to copies of any leases at the time you take the listing because you want to make sure this information is readily available by the time you need it.
As a buyer’s agent, keep an eye on the calendar. It helps your buyer if you follow up with a request on the lease information as the contract deadline draws near.
″ Standard 18(D) of the FR/Bar Contract
But wait, that’s not all! In addition to the requirements under paragraph 6, the seller also has obligations under Standard 18(D) of the contract.
Standard 18(d) reveals the additional information the seller must provide the buyer prior to and at closing. This will be addressed in Part 3 of this article series.
Meredith Caruso is Manager of Member Legal Communications for Florida Realtors
© 2017 Florida Realtors
Original — http://www.floridarealtors.org/NewsAndEvents/article.cfm?p=3&id=356137