One of the most difficult situations for a home seller to be in is to try and sell their home while it is occupied by a tenant. Tenants don't have an incentive to see the home sell. And quite frankly, most of them couldn't care less if it does. Sadly, this entire attitude problem can be dealt with, managed and straightened out in advance. Managing expectations and making sure the lease agreement is correctly written can save the seller, tenant, property manger and everyone else involved a lot of aggravation.
In Texas, Realtors are required to use a standard lease agreement that is 14 pages long. There's also the opportunity for the Landlord to add a set of Landlord Rules at the time the lease takes place. Something as simple as a hand written clause (by the Landlord) can state that during the last 30 days of the lease the Tenant will be notified 2 hours in advance of each showing. If Tenant refuses the showing, alters the time-period of the showing or attempts to reschedule the showing the tenant will have $100 deducted from their security deposit.
Tenants are notorious for canceling showings, rescheduling showings and sitting in the house during showings. The "I don't care attitude" must be managed upfront, not during the last 30 days of the lease which brings me to my next issue....
I tried to show a house last week and the listing agent told me that if my buyer wanted to purchase the home that they couldn't close for at least 60 days as the lease allowed the tenant a 60 day notice versus the very customary 30 days. If you list your home for sale and it is tenant occupied your lease should dictate that the tenant will be given a 30 days MAX notice that their the month-to-month lease will terminate, not 60 or 90! You should also charge your tenant 2-3 times the rent if they want to pay a flat fee to reject any and all showings during the last 30-60-90 days of the lease. Typically during the last 30 days of a lease you can begin to market the subject property. It definitely benefits the home owner to try and get 60 or even 90 days incorporated into the lease to market the property. This would mean more showings for the owner.
If you want to incentivize the situation you can offer a $500.00 reward to the tenant if the home sells during the last 30 days of the lease. This gives the motivation for the tenant to clean the house! It makes them think twice about laying around in their underwear while eating Cheetos when the house shows. This could also be promoted early on at the beginning of the lease.
The majority of lease situations (in all price ranges) are difficult when it comes to showing the property.
Another thing to consider is making sure your tenants sign off on the document that lets them know the house is showing. The document reminds the tenant to remove their valuables and provides disclosure about the showing process. This document should be signed EARLY ON when the lease is signed. Again, this is about managing expectations upfront and not at the 11th hour.
One of the worst things that can happen is when the tenant doesn't move-out and as a result torpedoes the entire transaction because they're squatting. The seller can then become liable and found in default of the sales contract. The whole situation could get expensive, nasty and not fun.
Why would a tenant do this?
The most popular reason could be that they can't "get into another home." This is what happens when you welcome a substandard tenant who barely qualified. NEVER just approve a tenant for the sake of doing so, especially when you're considering selling at the end of the lease! Other Landlords and listing agents may not be so accommodating. It would be in a sellers best interest to hire a seasoned Realtor to be aware of all these situations and how best to rectify them. I do my best to help the tenant "get out." This can be accomplished by actually showing the tenant properties or even helping them with a good reference a few months before the lease ends. If the tenant has their own agent it's wise to tap on your watch and remind them to call their agent.