Delicate handling of disruptive renters

When you inherit property, you might also get something you’re not ready for—problem tenants.

What’s the difficulty? Well, they’ll be nervous. They’ve had the same landlord for years and likely got comfortable paying below-market rent.

So when you step in to sell their home, these tenants are fearful. They may try to delay or stop the sale.

For instance, an estate attorney introduced me to a family that inherited a two-unit North Bergen, NJ building with a renter who’d lived there for decades.

She threatened to sue, right up front

When I met the tenant, she got right to the point, saying she was a paralegal who knew her rights and was ready to sue. Later, as we were doing inspections, she refused to answer my questions, acting as if she were in a deposition.

She also claimed she and the deceased owner had become like family, and that’s why the building was promised to her, not the heirs. We saw no evidence of that and referred it to the attorney.

But to get the highest value for this multi-family property, buyers had to view her apartment. So we crafted a compromise to calm the tenant’s concerns of being forced out of her home, and she allowed us to escort buyers through the unit.

Gaining tenant cooperation

We agreed the upstairs tenant could stay during the sale as well as when the building ownership passed to the buyer. We knew any attempt to remove them could trigger the tenant to:

  • block us from showing the unit
  • hinder our inspections and appraisals
  • begin expensive, time-consuming litigation
  • discontinue rent payments

So we created a workable solution. In fact, in the end, the tenant left me a voicemail thanking me for looking out for her.

Update just enough

To increase the building’s appeal, we did a quick, inexpensive renovation on the vacant first-floor unit. This would spotlight the property’s potential. Fleeing the ‘70s, we took these steps:

Removed shag carpet – exposed the hardwood floors, one of my favorite renovations because of its low cost and dramatic effect on how the property presents

Addressed extremely small kitchen – engaged our architect who created renderings showing how to reconfigure the kitchen, living room and dining room to make it open, spacious and livable

Refreshed with cosmetic updates – painted throughout, modernized by replacing old light fixtures and window treatments

Results At a Glance

  • Received 8 offers, most above asking, so we negotiated from strength
  • Sold with tenants in place, eliminating potential protracted battle in landlord-tenant court
  • Transferred tenant negotiations to the buyer

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