Tips for Residential Sales with a Tenant-Occupied Property
A Tenant-occupied listing can still move smoothly if Realtors plan ahead. Learn key AS IS contract deadlines, including lease disclosure and tenant estoppel letter requirements.
ORLANDO, Fla. — You are off to a listing appointment. There is nothing unusual about the property, but there is a Tenant living there and their lease extends through the end of the year (likely well past any closing date). The Seller informs you that they are not interested in making any repairs and would prefer all offers be on a Florida Realtors®/Florida Bar-ASIS-7x (ASIS) form contract. You always like to go into these appointments prepared, so you know this is a great time to point out the language in the ASIS - sections 6(b) and 18D. This is also a great time to plant the seed with the Seller to get ahead of obtaining the Tenant estoppel letter you know will be needed later in the transaction.
Now the listing agreement is signed, and you are already holding an offer in hand. An ASIS contract is ready to be shared with your Seller. The lease is for another few months. You know that this is the time to pay attention to a particular detail – whether Section 6(b) has been checked. The box has been checked, so now the “facts and terms thereof shall be disclosed in writing by Seller to Buyer and copies of the written lease(s) shall be delivered to Buyer, all within 5 days after Effective Date.” That clock ticks quickly and you want to get ahead of things.
In our hypothetical transaction, the contract has been signed by all parties and is effective. The Buyer has received a copy of the lease. Now, it is also time to pay attention to Section 18D. At least 10 days before closing the Seller shall provide the Buyer an estoppel letter from the Tenant. This letter needs to include details about the lease. Again, the clock ticks quickly.
With knowledge and some planning, these types of transactions don’t have to be chaotic. When involved in a Tenant-occupied residential sales transaction, stay ahead of these deadlines to increase the chance for a successful closing.
Maria Marchante is Associate General Counsel
Note: Information deemed accurate on date of publication
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