How to get a tenant to let buyers see their rental

Todd: Hello. Welcome to Todd Miller TV joined here today with Oana, our resident broker/property management expert. So this is a scenario and you can give me sort of what your opinion or what your recommendation would be. An investor is selling their house, they’re putting a house on the market and they have a tenant in the house. When agents call to show the house, the tenant is – making it very difficult.

So here’s an example, the tenant will say, “I’m not there and I’m going to be gone.” And they’re refusing to allow a lockbox on the property. They’re making it very difficult. How would you deal – like talk to that tenant as a property manager?

Oana: OK. First of all, a tenant does have a right by law to have 24 hours notice before somebody shows the property.

Todd: OK.

Oana: So that’s a legal notice that the tenant has to have. The second part is that hopefully, there is something in the lease agreement that stipulated that the tenant has to cooperate with showing the property so that if the tenant is uncooperative then that becomes part of the breach of contract on the lease.

Todd: So that tenant can get thrown out.

Oana: Right.

Todd: They could go to a court and say, “We’re filing eviction. You breached the lease because you’re not allowing showing.”

Oana: Exactly. So you can do that. When you can’t force a tenant to allow a lockbox, that’s not reasonable but the law does allow for 24 hours. The other thing is, most lease agreements actually have in them 24-hour access to the – access to the property with 24-hour notice by the landlord.

So in that particular instance, the property manager or the owner can give the tenant 24-hour notice that they just post a notice on their door saying, “Today is Tuesday at 4:00 o’clock. Tomorrow Wednesday at 5:00 o’clock, we will be showing this property.”

Now at that point, that tenant has been given 24 hours notice and that the landlord can actually enter the property without the tenant’s permission to show the property. Clearly, that’s not ideal because then the tenant can have the property be a mess and knocks everything. So you want something good.

A good way to deal with it is to bonus the tenant if the property is sold. So now, you’re incentivizing the tenant to have the property be clean, to make it easy to show by bonusing the tenant if the property is sold. So you can do a graduate bonus structure. You can say, “Hey, if the property is sold in the first month that it’s on the market, then we’ll bonus you $500. If the property is sold in the next 30 days, then we’ll bonus you $250 instead of $500.”

So, you want to make it to where they want to show the property right away that the longer this drags out, the less they’re going to receive. And that you want them to be pulling in the same direction as you.

Todd: OK. What about a scenario where the people go in a house and the tenant is there and all the tenant does is bad mouth the property? “We always have lots of problems with it and the neighbors have dogs that bark all the time and just – we were thinking about just moving out.” Like they complain about everything just to sort of stop the sale from happening. He just has another agenda.

Oana: Absolutely. Again, you have to have a tenant pulling in the same direction. So you offer some sort of incentive for the tenant to want the property to sell. The other thing is if that property is shown with a real estate agent, chances are that that real estate agent has better control of the situation and is able to better advise their buyer that this tenant has an ulterior motive and that the things that the tenant is saying need to be considered in light of the situation.

Todd: OK. Good. Thank you.

Oana: You’re welcome.

Todd: All right. So I just want to share that with you sort of it happens and I’ve heard it a few times in the last few weeks from people that – with different scenarios but the same general.

So thought I’d share that with you anyway. Thank you very much for being on my program.

Oana: You’re welcome.

Todd: That is my update for today and hope to see you on another video. Thanks.