Selling a House with Tenants in it in Kentucky? Here’s What You Need to Know

Wanting to sell a house with tenants in Kentucky can be tricky, but it’s not impossible. This circumstance most often occurs when a landlord is looking to cut their losses from a less-than-profitable property, wants to initiate a 1013 exchange, or transfer ownership to a landlord who’s close to the property. 

Selling a House with Tenants in it in Kentucky

(In other cases, the current landlord’s disinterest in the industry or market may lead them to seek opportunities to sell rental properties to a new landlord.)

You must be aware of Kentucky’s landlord-tenant law pertaining to landlord’s rights and renter’s rights throughout the selling process. See the guide below to prepare yourself for a sale that respects and protects your and your tenants’ rights.

How to Sell a House with Tenants in Kentucky

Now and then, an opportunity arises for you to sell a house while your tenants still occupy the residence. 

Although the property does belong to you, and it is your exclusive right to sell when you deem it a necessary or desirable course of action, your tenants’ presence will affect the process. To ensure you are respectful of your and the tenancy rights throughout each stage of the sale, review the steps below on selling a house with tenants in Kentucky.

Informing Tenants of Intention to Sell

Of course, the first thing you’ll need to do before selling the rental is to inform the current tenants of your intention to sell. When doing this, you must understand two things: 

  • Your tenants’ right to live in the property until the lease agreement’s expiration 
  • Your tenants should be aware of a transfer of ownership to a new landlord, especially if they wish to continue in their current lease agreement once your ownership has expired.

Informing tenants of intention to sell is crucial to their rights as the present renters and your potential success in closing on a deal. This is because you’ll want to exercise your right to show the house to prospective landlords, which is only possible with the tenants’ cooperation.

(Failing to inform your tenants of upcoming showings or neglecting to respect their privacy may sour relations between you and them. This may lessen their motivation to clean or otherwise prepare the house before showing, damaging your chances of selling.) 

Generally, state law requires the landlord to provide a written notice informing the tenant of plans to show the property at least 30 days in advance. This notice should then be followed by an announcement of an upcoming visit at least 24 hours in advance. (In Kentucky specifically, you must provide notification at least two days in advance.) 

Lastly, you must schedule the visit within standard business hours according to KRS 383.615, discussed in further detail below.

Offering to Sell to Tenants

In some instances, it’s easier to consider offering to tenants instead of going through the hassle of pursuing and securing new prospective buyers. This can be beneficial to you because it streamlines the selling process and doesn’t require your tenants to vacate the property. 

The most significant advantage is you don’t have to place the home on the open market. This is because you and the tenant already have an existing agreement. All you need to complete this transaction is an attorney to represent you and help close the sale. (Typically, it’s the buyers’ responsibility to secure a formal closing company.)

You might also need a real estate realtor to help you and the tenants reach a fair agreement on the property’s sale price, as you may have differing opinions. Tenants often come to think of themselves as the property owners, especially if they’ve lived in it for years. 

It can be a bit jarring for you to offer a significantly higher price than what they expect or what they’ve become used to paying, especially if they are unaware of market fluctuations. 

Finally, you’ll need a title company to finalize the transfer of ownership from you to your tenants.

Notice Period Needed Before Selling Your House

As discussed above, you are obligated to notify your tenants of your intention to sell and each scheduled showing of the property. This will help ensure their cooperation in the selling process and protect their rights as the current occupants. 

The notice period needed before selling your house is at least 30 days in advance. Specific Kentucky regulations related to entering the property for showing are as follows (emphasis added):

  • According to KRS 383.615, “A landlord shall not abuse the right of access or use it to harass the tenant. Except in case of emergency or unless it is impracticable to do so, the landlord shall give the tenant at least two (2) days’ notice of his intent to enter and may enter only at reasonable times.”
  • According to KRS 383.670, “During any absence of the tenant in excess of seven (7) days, the landlord may enter the dwelling unit at times reasonably necessary.”

Keeping your tenants informed throughout the entirety of the process is the best way to maintain a positive relationship, even as the business association expires. This will also improve the tenants’ willingness to work with the new landlord, as they will have had ample time to prepare for the administrative changes. 

Renters Rights in Kentucky

As you prepare to sell your Kentucky property, you must be well-versed in renters’ rights in KY and their legal obligations. Here are some of the primary rental laws to keep in mind:

  • According to KRS 383.560, the tenant has only been given legal “notice” by the landlord if you have “delivered in hand to the tenant or mailed by registered or certified mail to him at the place held out by him as the place for receipt of communication, or in the absence of such designation, to his last known place of residence.”
  • Regardless of the landlord’s intent to sell, you must provide the tenant housing that meets Kentucky health and safety housing codes throughout the duration of the lease. During this time, the tenant has a right to housing that is “fit and habitable” and with all utilities in functioning order and repairs resolved in reasonable periods. (KRS 383.595)
  • According to KRS 383.625, the tenant can send the landlord a written notice detailing the landlord’s failure to meet their obligations outlined in the lease agreement with the intent to terminate the lease at least 30 days after notification if the problems aren’t resolved within 14 days.
  • According to KRS 383.700, tenants can take legal action against landlords who abuse their entry rights, even if it’s to show a property for sale.

Landlord Rights in Kentucky

According to Kentucky’s Attorney General Daniel Cameron, landlords have the right to enter a rental house for several reasons, including:

  • Making repairs 
  • Providing maintenance 
  • Showing the property to prospective renters or buyers

However, you can only exercise these landlord rights in observance of your tenants’ rights, meaning you must recognize their right to privacy. Further, you must visit at times that are convenient to the occupants. 

Landlord Rights in Kentucky

Using your right to enter in a disturbing or disrespectful way to your tenants’ schedule or privacy is considered harassment. 

Other critical landlord rights in KY and obligations to be mindful of include:

  • According to KRS 383.700, you can take legal action and/or terminate the lease agreement if the current tenants refuse lawful access to the property.
  • Under KRS 383.685, you may have the right to claims for possession, rent, and damages if the lease agreement is terminated. 
  • According to KRS 383.675, if you accept rent payments while knowing the tenant has defaulted or strayed from the terms of the lease, you waive your right to terminate the lease based on that breach.

Evictions in Kentucky

Evicting tenants is the most negative scenario that could precede a property sale. It’s not fun for anyone, tenant, or landlord. The main things that would justify an eviction are:

  • The tenant’s failure to pay rent according to the lease agreement terms
  • Violation of the lease agreement terms 

If you choose to proceed with the eviction process before selling the house, be aware that you cannot do so without a court order. 

Evictions in KY require an initial seven-day written notice of nonpayment before eviction proceedings begin. If the tenant does not pay the month’s rent before the seven-day period expires, you must notify them of your intention to evict in 14 days. On the 15th day, you can legally move forward with the eviction process.

Conclusion

Selling a tenant-occupied property in Kentucky can be a complex process. Yet, it is not impossible. You must simply be aware and respectful of your tenants’ rights by informing them of your intention to sell and hosting showings at reasonable business hours. 

Additionally, your tenants cannot deny you entry for showings and should reasonably cooperate throughout the process. With Time Worthy Property Solutions, you can be mindful of landlords’ rights and tenants’ rights as you place your property on the market and enjoy a smooth, straightforward closing. See Time Worthy’s case studies to learn more and contact the experts today to get started.

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