Selling a house is already a complicated process. Selling a house when tenants won’t move out (usually referred to as squatters) can make things even more stressful.
This is something I see fairly often across the New Orleans metro area. Sometimes the tenant has been there for years. Sometimes they’re behind on rent. Sometimes the relationship between the owner and tenant has just broken down. Many other times, with all the “transients” in New Orleans combined with all the damaged houses that sat after Katrina at some point or another, people just helped themselves and moved right in and made places their own. Even if the house didn’t have water, or power, or doors and windows! Whatever the situation, many property owners start to feel stuck. They feel almost powerless.
The good news is this: you can still sell the property, even if the tenants are still living there.
Let’s walk through what you should understand before deciding your next move.
First: Understand the Lease Situation
The first thing that matters is whether the tenant has a lease or not.
If the tenant has a current lease agreement, the new buyer typically has to honor that lease until it expires. That means the tenant may have the legal right to stay until the end of the lease term.
If the tenant is month-to-month, things are a little different. In most cases, proper notice can be given to terminate the tenancy according to Louisiana law.
But here’s the reality many landlords run into: legal rights and practical reality are two different things.
Even if the tenant is supposed to move out, that doesn’t mean they will do so easily. Some tenants know the laws very well and will use them against a landlord to the fullest extent in order to stay as long as they can without paying. There are predatory tenants out there and when you factor in the squatter situation these people are virtual experts at staying as long as they can. They literally do not care at all about the situation other than keeping themselves in the property as long as they can.
The Problem With Selling a Tenant-Occupied Property
When tenants refuse to cooperate, selling the property through a traditional listing can become very difficult.
Here’s why.
First, showings become a challenge. Tenants may not want buyers walking through the home. At this point they are typically going to refuse access or make the home look unappealing during showings.
Second, the condition of the property may suffer. If tenants know the house is being sold, they sometimes stop maintaining the property or become less cooperative. Worse off, they may get destructive with the property. We just had a tenant move out that was 2 months late on the rent and he punched holes in the walls just to be spiteful.
Third, buyers get nervous. Most homebuyers don’t want to inherit a tenant problem. They don’t want conflict and they certainly don’t know how to handle the situation as far as legally removing them. Even many investors will think twice if they believe they’re stepping into a complicated situation. It’s a hassle and the situation has some serious unknowns.
All of this can lead to:
• Fewer interested buyers
• Lower offers
• Deals falling apart
That’s why many landlords find themselves stuck when tenants won’t move.
Option 1: Work It Out With the Tenant
In some cases, the best solution is to try to work things out directly with the tenant.
This might mean offering a “cash for keys” agreement, where you provide money to help them move in exchange for leaving the property in good condition. Or maybe just offering money once they are fully out and willing to sign something to that effect.
While it may not feel ideal, it can sometimes be faster and cheaper than going through a lengthy legal eviction process.
Some tenants are more willing to cooperate when they understand the situation and have time to make arrangements.
Option 2: Go Through the Eviction Process
If the tenant refuses to move and negotiations fail, eviction may be the next step.
Louisiana has a legal process that must be followed, which usually involves:
• Providing proper notice
• Filing paperwork with the court
• Waiting for a hearing
• Scheduling a physical eviction if necessary
This process can take time, and it can become expensive depending on the circumstances.
During that time, you may still be responsible for:
• Property taxes
• Insurance
• Maintenance
• Mortgage payments
For many property owners, the timeline becomes frustrating.
Option 3: Sell the Property As-Is With the Tenant in Place
This is often the simplest option for landlords who are tired of dealing with tenant issues.
Some investors and cash buyers are willing to purchase properties with tenants still living in them, even if those tenants are not cooperating.
The advantage here is that you can sell the property without having to:
• Evict the tenant first
• Clean up the property
• Make repairs
• Wait months for the situation to resolve
Instead, the buyer takes on the responsibility of dealing with the tenant situation after closing.
For many landlords, this allows them to move on quickly and avoid additional stress.
Why Local Buyers Matter in These Situations
Tenant issues can be complicated, and not every buyer understands how to handle them.
Many national companies advertise that they buy houses fast, but in reality, they may just put the property under contract and try to assign it to someone else.
If the tenant situation looks difficult, they often back out.
A local buyer who has experience with rental properties is usually better equipped to evaluate the situation and close the deal.
They understand the local market, the legal process, and the types of tenant situations that come up in New Orleans.
Final Thoughts
Owning a rental property can be a great investment, but tenant situations don’t always go as planned.
If you have tenants who refuse to move, you still have options.
You can try to work things out with the tenant.
You can go through the eviction process.
Or you can sell the property as-is and move on.
Every situation is different, and the right solution depends on your timeline, your finances, and how much energy you want to put into the problem.
If you’re dealing with a difficult tenant situation and want to explore selling the property, we’re always happy to take a look and talk through your options.
You can visit www.nolabuyshouses.com or call/text 504-264-1407 to get started.