Being a modern-day landlord is not an easy job, especially when looking to sell your rental property. You may have found yourself wondering, ‘Can a landlord sell a house with tenants?’. Luckily for you, the state of Wisconsin is typically in favor of the landlord when it comes to landlord-tenant laws.
All it takes is knowing the correct information on the right laws, and you will be able to sell your rental property. Landlord rights and tenant rights in Wisconsin do not disqualify you from selling your property with tenants attached. The rest of this article will key you in on what laws and rights you need to know and some of the best ways to sell a rented house.
Wisconsin House Selling Laws
When selling a rental property, the most critical landlord-tenant laws to research are those concerning rental agreements and notice of entry. Wisconsin law states that if a landlord sells a rental property during a fixed-term lease, the new buyer must continue the lease agreement until its date of expiration.
Wisconsin law also states that a lease agreement shorter than one year does not require a written lease. In the case of month-to-month tenants, new buyers do not have to continue current leases. You will need to give your tenant a 28 days notice before the end of a lease agreement.
If you find the grounds to terminate a lease due to tenant violations before selling, you will need to adhere to eviction laws. The eviction process may include the steps of a written notice, a summons and complaint, an eviction trial, and a judgment resolution.
If you decide to sell while tenants are currently living on the property, you will need to adhere to Wisconsin’s notice of entry laws. For all repairs, renovations, and showings, the tenant must receive a 12-hours notice. It would be best to announce yourself to anyone home before entering.
Landlords Rights When Selling a Rental Property in WI
In Wisconsin, your rights vary depending on your type of lease agreement. Knowing your landlord’s rights is crucial in ensuring a smooth transition when selling.
Typically a rental agreement will either be a fixed-term or month-to-month lease. Both agreements come with different laws regarding selling your property. If you are in a fixed-term lease for one year, you may have to wait until the leasing term is up to sell the property. You will have to notify your tenant 14 days before the end of the lease that you will be selling.
If you have a month-to-month lease, selling your rental property will be a quicker process. Wisconsin law requires that you give a 28-day notice of intention to sell and of lease termination. After this, you are free to sell the property to whoever.
You may be able to enforce the property sale clause if you need to sell your property in the middle of a fixed-term lease of a year or longer. This clause will need to hold up in court but may allow a sale to go through, voiding the lease agreement once a new owner takes over the property.
If you are still nervous about selling your property with tenants attached, you can always pay your tenants to leave. By offering to pay their moving expenses or a new security deposit, your tenants might be willing to break the lease. If you go this route, it is wise to reach out with plenty of notice. Your tenants will be more open to the idea if they do not feel blindsided by the idea of moving out.
Renters Rights When Selling a Rental Property
Just as it is essential to know your rights, you should also know the renter’s rights before selling a house with tenants. Here is a list of renter’s rights when selling a rental property to be aware of.
- If you sell a property with time still left on a fixed-term lease, your new buyer will have to honor the remainder and terms of the lease(s)
- The buyer must agree to honor the current lease length and terms. They can propose a new lease agreement, but the renter does not have to sign it.
- An exception to this would be if you included a clause in the original lease stating that all current lease agreements will void in the event of a property sale. In this case, the new buyer can choose to write up a new lease or terminate, and the renter(s) would have to abide.
- In month-to-month leases, renters typically have fewer rights when you decide to sell the property. As long as you give them the 28 days notice the law requires, they have to respect the end of the lease agreement.
How to Sell Your House with Tenants In It
There are a few different ways to approach selling a rental property. It is wise to consider the sides of all parties. Keeping yourself, your tenant(s), and potential buyers up to date will help with the success of the process.
A few options include selling to your tenants, waiting for lease(s) to expire, keeping your tenants informed, and selling to someone who will continue to rent out the property. You will also want to go in knowing if you want to sell your house fast in Brookfield and if you want to sell your house by yourself.
Sell to Your Tenants
Proposing a sale offer to your tenant can be an easy way to start the selling conversation. A tenant who is already comfortable with the property might be interested in buying from you. Selling to your tenant would negate the need to discuss ending lease terms or transferring the current lease to a new owner.
If your tenant presents concerns about buying from you, you can offer a seller financing agreement. In this agreement, you would step up from landlord to lender, and your tenant would make payments to you towards their purchase of the property.
If your tenant passes on buying the property, you will remain on good terms with them. The offer can better prepare the tenant with your intent to sell and make them feel like they had some choice in the matter. Your tenant being aware of your intention to sell the property will give them more time to prepare for the change.
Wait for Lease to Expire
Waiting for the lease(s) to expire is another good option. Respecting the current lease(s) and giving a 14-day notice of lease termination before the official end date will help keep potential drama from stirring with your tenant.
There are several plus sides to waiting for the lease to expire. For one, you can easily tackle any renovation and repairs before listing the property once the space is unoccupied. With no one living on the property, you will be able to get things done on your own time without having to provide a 12-hour notice of entry.
A second benefit to letting the current lease(s) expire is the potential of increasing property value. When tenants move out, you can increase the rental price allowing the estimated property value to increase. You can list the property at a higher price and potentially receive a higher profit return.
Waiting for a lease to expire may be beneficial depending on the time of year. The best time to sell your house may change for a few different reasons. Planning for the month your listing goes public can help prepare you for the market trends during that time.
In cases where your tenant has broken lease terms, you will be able to terminate the lease sooner. Examples of lease violations include failure to pay rent, falsifying application information, causing severe damage to the property, and more.
Inform Tenants of Desire to Sell
Informing tenants about your intentions to sell is an important step. Keeping tenants in the know will help ease the process overall. Scheduling a meeting with your tenants and presenting a transparent plan of action is an excellent way to start. Presenting any changes the sale could impose is a wise move to help tenants prepare.
Coming to the meetings with a plan to work together to show the property at times convenient to both properties is a smart move. One way to do this is by preparing a questionnaire where the tenants can fill in their preferable days and times convenient for them to leave the property for a showing.
Do not let communication drop off after finding a buyer. Inform your tenants once a sale is finalized and let them know what will happen next. The professional move will be to not leave your tenants with questions about the sale.
Sell to Someone Who Will Continue to Rent Out the Property
Choosing to sell to someone who will continue to rent out the property is a move most favored by your tenants. While you can sell to anyone you want, choosing someone who wants to be a landlord will help your tenants out when their leasing period ends.
If you sell before the fixed-term lease of your current tenants ends, the new buyer will typically have to honor the lease terms until its expiration. Once a fixed-term lease expires, the new owner can then terminate the lease altogether, forcing tenants to move out, or they can draw up their leases and renegotiate terms.
Selling to someone who wants to be a landlord is a safe route if you are concerned about finding a new buyer who will understand the current fixed-term lease. If you choose to sell once your current tenant’s lease has expired, then you can be less picky about choosing a new buyer.
Selling a house with tenants attached can be a confusing process. Luckily in Wisconsin, the laws are on the side of the landlord in most cases.
There are several options for landlords looking to sell their rental property with tenants attached, including selling to your tenants, selling to someone who will continue to rent out the property, informing your tenants ahead of time, and waiting for current leases to expire. As long as you make yourself aware of landlord rights, renter’s rights, and Wisconsin rental laws before listing your property, you are likely to have a successful transition when selling your property.