There are many reasons why you may choose to show a property with tenants. Your tenants may give you advanced notice on their intent to move, giving you time to find a replacement while they are still there. You may also decide to sell a property before your tenants’ rental agreements expire. No matter the reason, you must tread lightly when showing a property with tenants in order to avoid legal troubles and uncooperative tenants.
Consider the pros and cons
You may decide that you cannot take the financial hit of having a vacant unit; showing a property with tenants means your income stream will go uninterrupted as you’ll be less likely to lose out on rent money. You’ll avoid having a vacancy because the new tenant can move in right after the previous tenant moves out. Going from one tenant to the next also means you will only have to transfer utilities once, between the previous tenant and the new tenant. You also have the advantage of showing the property with free staging, since the current tenant will have all their belongings set up for potential renters and buyers to see.
Although it can be appealing to simply show a property with tenants because of the financial benefits, you should also carefully consider what could possibly go wrong. It is difficult to ensure that the unit will be presentable when you want to show it; unpredictable tenants lead to unpredictable showings. There’s also always the possibility that the current tenants will try to sabotage your showing if you do not have a good relationship with them. In addition, if your current tenant holds up the moving process, you might not be able to move in your new tenant right away; this can cause serious problems if you give the new tenants a move in date that then becomes unavailable.
Ask for a convenient time
If you’ve decided that the pros outweigh the cons and you will show a property with tenants, begin by discussing your needs with them. Approach the tenant conversationally and ask what time is most convenient for them to show the dwelling to applicants. Make it simple by providing them with a few potential times for showings so that the tenant does not have to be responsible for deciding themselves, but instead only must pick what time works best for them. Suggest times that are within regular business hours and try to refrain from scheduling showings on the weekends. Times should always be convenient for the tenant and not infringe on their ability to live peacefully.
Notify current tenants before showings
You must always give your tenants proper notice in writing that you will be showing the property to ensure that they are prepared and to avoid any harassment claims. Most states require between 24-48 hours’ notice before you can enter the dwelling to show it, so make sure you are clear on state and local laws as to avoid a lawsuit. Ensure that the tenant cannot claim that you entered the dwelling to show it without proper notice.
Not only is proper notice legally required, but it also gives the tenants a chance to prepare the unit for the showing. The tenant my need a few days to clean and make sure that the unit is ready for visitors. If you repeatedly enter the home without notifying the tenant, they may become decreasingly cooperative and may not want to help you with the showings.
Incentives can be a great way to ensure that tenants cooperate with you while you show your property to potential renters and buyers. Your current tenants might be happy to help you but be wary of preparing their unit to be presentable for showings. If this is the case, you can offer to pay for a cleaning service before each showing. This not only makes sure that the unit is presentable, but also takes the stress and responsibility off of the tenants.
You can also give your tenants financial incentives, such as giving them a rent discount for cooperating with the showings. Many tenants will be more than happy to work with you if it means they save money before moving. You can also reward your tenants for good showings by giving them restaurant or store gift certificates to show your thanks. Give these gift certificates with a personalized thank you card to maintain a strong relationship with the current tenants.
Lastly, you can also offer to pay for animal day care if the current tenant does have pets. This will ensure that the animals do not scare away any potential tenants while also taking this burden off the current tenants. Instead of locking their animals up for each showing, you can give the tenant’s pets a mini vacation for only a minimal cost to you.
What to avoid
You should always avoid hosting an open house. Because open houses will often last for hours, they will require your tenants to be at home for an extended period of time, usually on a weekend. This is a much larger time commitment than what is needed for a one family showing that only takes 15-20 minutes. In addition, with more people in the unit at one time, there are more chances that you will not be able to watch everyone; you risk viewers stealing and/or damaging your tenant’s property. Finally, many visitors during an open house are not serious about renting or buying a property, which means you will have inconvenienced your current tenant for no good reason. Serious potential applicants and buyers will be willing to schedule personal showings, so an open house is truly unnecessary.
Never put up “For Rent” signs in front of a property that has a current tenant. Potential tenants may see the signs, come over unannounced, and try to communicate with the tenants rather than you. Strangers should never disturb your tenants and encroach on their peaceful living because of you, so it’s better to list the property online and in print. You may face similar problems if you put up a “For Sale” sign in front of the property, so if you are looking to sell, look into working with a realtor who can privately advertise the home. If you do decide to put out either a “For Rent” or “For Sale” sign, make it clear that people cannot disturb the current occupants. Include language in the sign such as “Showing by Appointment Only,” or “Contact (Phone Number) for More Information.”
Avoid needless showings and other activities that will inconvenience the current tenant. Because you need the tenant to continue to work with you cooperatively, you should try to impose on them as little as possible. Excessive showings will likely make cooperative tenants decreasingly helpful. After many showings the tenant will be less and less inclined to clean their dwelling beforehand and/or comply with what you need. In the same vein, you should avoid using lock boxes on a property because there is always the potential for anyone to get into it and illegally enter the dwelling. You should not trust anyone but yourself and your tenant with keys and access to the property.
What does the law say?
You legally have the right to show a property and dwelling even if the tenants are still occupying it. The law does require that you provide the tenant with notice of your intent to enter to show the unit. As of today, 24 states require at least 24 hours’ notice before you or anyone else can enter the home. Other states require even more time, so check with state and local laws to determine how much notice is required and to ensure that you are following the law.
When you first move a new tenant into the property, make it clear from day one that you may show the property to potential tenants and buyers. Include this information in the rental agreement and from the start of the tenancy specify the procedure you will follow should you decide to show the dwelling. This will ensure that the tenant is legally bound to comply with you and cannot claim that you have tried to change the rental agreement.
You must also be wary of harassing or intimidating your tenant during the showing process. Legally, you cannot show the dwelling so many times that it disturbs the tenant’s living conditions. For example, you should not be showing a unit every single day for multiple weeks. Avoid making your tenants feel inconvenienced by your needs and only show the property to applicants and buyers who you believe are serious about renting or making a purchase.
The law also specifies that you may only show the home during reasonable hours, which usually means normal business hours during the week. However, based on case law, you may be able to hold showings on Saturdays and Sundays if they are held during reasonable hours. To avoid a harassment lawsuit, communicate clearly with your tenant and see if they are willing to work with you to show the dwelling during non-business hours or weekends. If not, avoid inconveniencing the current tenant at all costs.