In some situations, a property owner will have a house listed for sale and vacant for a period of time. Of course, the property is not generating income if it is sitting empty, so an owner may decide to lease the property until it sells. If you are considering renting a house for sale, be sure you do the research necessary to protect yourself.
In order to avoid moving right after settling into a house that is on the market as a house for sale and rent, it is advisable to have the owner/landlord put into the lease that any sale of the property be contingent upon giving you at least 30 to 60 day notice. As an alternative, you can request that the buyer honor the entire term of your lease. With this, you are asking the owner/landlord to agree to make the terms of your lease a condition of the sale of the property.
Bear in mind, when you move into a rent house for sale, you will be required to allow the house to be shown to prospective buyers. You will also be required to have the house in a neat and clean condition with very little notice. Those who sell real estate will tell you that many times, prospective buyers will want to look at a property at the spur of the moment, so expect the owner/landlord to at request last minute showings. You can ask the owner/landlord put a condition in the lease agreeing to give you up to 24-hour notice, and to show the property at reasonable times that are not too early or too late. In addition, you might want to consider having the lease also state that there will be no brokers’ open houses, or at least see if you and the owner/landlord can agree on a limited number of open houses and the hours of the open houses.
When real estate is on the market on the multi-list service, there is usually a lock box installed with a master key so that realtors can show the home. If you are renting the property, you might need to have an agreement with the owner/landlord, in writing on the lease, that a lock box will not be placed on the property for your safety, and the safety of your personal possessions. While realtors are professional people who would never abuse the use of a lock box, there is always the possibility of someone making duplicate keys.
When you think about renting a house while for sale, make sure that the property is not in foreclosure. Foreclosure actions take months to complete and property owners in foreclosure often want to collect rental during the pendency of the foreclosure action. However, the lender who has started a foreclosure proceeding is not ever obligated to honor the terms of your lease agreement with the original property owner. The foreclosure action can end and the lender is only obligated to give you 24 to 48 hour notice to vacate the property. After that time, the lender can change the locks, and you are considered a trespasser by law and you can be arrested. You can request that the property owner/landlord add an addendum to the lease stating that, in the event that there is a foreclosure action of any type on the property, including a short sale, you will be informed in writing. That is about the most you can do to protect yourself in a foreclosure situation. As long as the owner/landlord notifies you that there is a foreclosure pending, you cannot ask for moving expenses or any other kind of damages.
Another thing you will want to do when renting a house for sale is to make sure that the lease specifies the conditions regarding the return of your security deposits. Usually a lease will state that security deposits must be forfeited if the lease term is not completed. When the house is for sale, the issue of a tenant vacating the property early is not applicable and should be removed from the lease.
You may consider offering to lease purchase the property if you really like it. A lease purchase is a complicated arrangement. LandLordStation.com has articles and other information pertaining to lease purchase agreements to help you make an informed decision as to whether to offer that option to the owner/landlord.
In conclusion, if you consider renting a house for sale, be sure to protect yourself in writing with the owner/landlord and do some investigation, if possible, regarding pending foreclosure proceedings. Keep in mind that it is difficult to rent a property when it is listed for sale so be sure to set your own terms for scheduled showings.
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