Sellers often worry tenants will leave if they become aware a property is on the market. However, not only does the existing lease protect the tenant, it is also a means of ensuring he stays.
A lease follows a property when it is sold. What does that mean?
Well, when a buyer purchases a duplex occupied by tenants with current leases, she assumes the terms and conditions of the existing leases. As a result, the tenant also retains all the rights and privileges afforded him under the previous owner’s lease.
Of course, once that lease expires, the new owner can replace it with a lease of her own, or ask the tenants to vacate (in accordance with state law, of course).
What if the new owner wants to move in? This can be accomplished if the buyer specified some portion or the entire property be delivered vacant, and the seller agreed to the terms.
How is this achieved? Most often, sellers offer a tenant a financial incentive to vacate. How much? To date, there are no guidelines for this in the state of Minnesota.
It is interesting to note, however, in other parts of the country, this is a rather common occurrence.
In fact, in some rent-controlled cities like West Hollywood, Calif., tenants may not be relocated unless either the new owner or a relative of the owner’s is planning to move in. What’s more, there are set guidelines as to how much that will cost. In a one bedroom unit, a tenant must be paid $7200; an amount that increases to $12,800 for a three bedroom.
While that may be in our future, to date, relocation fees here are still negotiable.