Tenants don't magically disappear every time a property gets a new owner. Each state has laws to keep tenants in the places they are renting, regardless of whether the landlord sells or mortgages the property. Generally speaking, you can only evict a tenant who does something wrong. Violating the terms of the rental agreement or not paying the rent on time are reasons to evict a tenant in almost every state. If a tenant's behavior is exemplary, you have to find another legal way to evict.
Pulling the Plug on a Periodic Tenancy
A tenant who does not have a fixed-term written lease is probably a periodic tenant. Periodic tenancies run from one rent payment day to the next, so a tenant who pays rent monthly is known as a month-to-month tenant. You may evict a periodic tenant at any time by giving a timely notice to quit. Generally, your notice must be at least as long as the rental period. For example, you’ll need to give a month-to- month tenant at least one full calendar month's written notice. Different states and cities have different ordinances, so check the rules that apply to your state.
Pulling Rank on a Fixed-Term Tenancy
If you live in a city and state that allows it, you may qualify for an owner move-in eviction, commonly referred to as OMI. This allows you, the property owner, to remove even a model tenant from the rental unit for the sole reason that you wish to move in, even if the tenant is on a fixed-term tenancy. The rules vary from city to city. In many cases, you must commit to using the property as your primary residence for at least three years. You have to give your tenant notice of, typically, 30 to 60 days. Most OMI evicted tenants are entitled to relocation costs at a rate set by the city. You also have to give your tenant the first right to reoccupy the unit when you eventually move out.
Pulling Out Your Wallet
If your tenant has not yet reached the end of a fixed-term lease, is a model tenant, and your city does not permit OMIs, then your options are extremely limited. Sweet-talking your tenant may be your best option here. Try offering incentives for the tenant to leave early and void the lease. For example, you could offer free rent for a month or two while the tenant finds an alternative property, or waive costs that you would otherwise be able to deduct from the security deposit.
Pulling Out of the Contract
If you will only close the purchase if the tenant leaves, include a contingency in your purchase contract that allows you to walk away if the seller does not secure possession. The wording of the contingency should make the seller responsible for removing the tenant, including any relocation incentives and fixing any damage the tenant causes prior to moving. This strategy won’t work for OMIs, as the seller is not the person moving in. If OMI is your only legal option, you’ll have to wait until closing before starting the eviction process. Factor statutory relocation expenses and possible court costs into your offer price.
Jayne Thompson earned an LLB in Law and Business Administration from the University of Birmingham and an LLM in International Law from the University of East London. She practiced in various “big law” firms before launching a career as a commercial writer specializing in finance and tech. Her work has appeared on numerous financial blogs including Wealth Soup and Synchrony. Find her at www.whiterosecopywriting.com.