Friday, April 12, 2013

Buying a Home with a Tenant in It

When prices on Puget Sound homes began their decline  in 2008, many homeowners decided to wait for the market to rebound before selling.  They opted to rent their homes until the values increased.  Fast forward five years and we have a seller’s market.  Homeowners are finally able to list their home for sale.  Sometimes, those homes have tenants in them who are finishing up a lease.  What is a homebuyer to do?  Are there some things they should know before moving forward with a purchase? 

According to Dorothy Ennes, Manager of our Property Manager Division for Coldwell Banker Bain, homebuyers should know that if a home for sale has a tenant in it, the home sale is subject to the terms of the lease; ie, the owner can’t increase the rent or require the tenant to vacate or otherwise change the terms of the lease.  It is a good idea, prior to closing to ask the seller for a copy of the lease , the move in inspection report,  and a tenant ledger so you can know if the tenant has consistently paid their rent on time.  Also, by Washington state law, you cannot collect a deposit unless there is a move in inspection and you can’t charge a tenant for damages, even if the property was brand new when they moved in.  Without a written move in inspection, the owner can’t charge the tenant for damages.
In our hot seller's market, we are likely going to see more homes for sale that are occupied by a tenant. It is important for a buyer to do their due diligence when purchasing such a home.

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