When it comes to real estate, buying a rented property can be a real financial opportunity since the selling price might be significantly lower. However, that’s not always the case, and for the seller, there are plenty of benefits to selling an occupied property.
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| Is It Possible to Buy a Rented Apartment to Live In? |
If you're looking to buy a rented place with the intention of moving in, there are several rules you need to follow to ensure your investment goes smoothly.
Can you evict a tenant in an apartment? How do you end their notice period? What are the perks of buying a rented property? Is it better to buy it to rent it out? What steps do you need to take to buy a rented property? And what discounts might you get? You’re about to find out!
How Long to Recover a Rental Apartment?
If you want to buy that apartment to move in, it's definitely possible. However, the law protects tenants and requires you to respect a notice period before asking them to leave.
The legal notice period is two years if the rental contract ends less than two years after you purchase the property, even if the lease end date is less than two years away. At Track stone, we only sell occupied properties, which allows you to invest with full knowledge, making it easy to calculate your net and gross returns. We even help you simulate your investment based on your contribution or your notary fees!
The Termination Letter
The termination letter is a must to inform the tenant of your intention to reclaim the property. If you want to take back the apartment to live in, you need to notify the tenant by registered mail at least six months before the lease ends.
If you miss that deadline, your request to reclaim the property won’t count, and you’ll have to wait again before acquiring your home.
The termination letter must meet several legal obligations:
- It must be sent to all parties on the lease.
- Ensure all necessary and accurate information is included: reason for the request, your name as the new beneficiary of the property.
- It must be sent with another official document, the “information notice regarding the obligations of the landlord and the tenant’s rights for recourse and compensation,” which reminds everyone of the landlord's obligations and the tenant's rights.
You can also have the termination letter delivered by a notary or a bailiff. It’s best to avoid delivering it personally. If you do, be sure to get proof of return as a safeguard to show you acted in good faith.
Good to Know: The notice period includes holidays and weekends. So, if the notice ends on a Sunday, you can reclaim your property the following Monday.
What’s the Best Approach? Send your termination request to the tenant by mail at least six months before their lease ends if the rental property is empty, and three months if it’s furnished. For example, if the lease ends in December, notify the tenant in September for a furnished property and in June for an empty one.
What to Do If There's a Dispute with the Tenant After the Termination Letter?
If there’s a dispute with a tenant after sending the termination letter, the new owner of a rented apartment needs to follow a specific process.
First, check that the termination letter was sent following the legal deadlines and required formats, like sending it by registered mail with acknowledgment of receipt. If the tenant disputes the notice, mediation can be a first step, involving a discussion between the tenant and the owner to resolve the issue amicably.
If mediation fails or isn’t suitable, the owner may need to pursue legal action, often requiring a lawyer specialized in real estate law. The competent court will depend on the type of dispute, like unpaid rent or non-compliance with lease terms.
Keep in mind that the ALUR law protects tenants, so the new owner must ensure all termination grounds are valid and justifiable.
It’s also wise for the owner to take out insurance for unpaid rent. This can offer protection in case of financial disputes with the tenant. Lastly, it’s crucial to keep all documents related to the transaction and communication with the tenant, as they might be needed in legal proceedings.
Tenant Termination: How Does It Work?
A property owner can terminate a tenant’s lease for three reasons:
- To sell the property;
- To reclaim it (for personal use or to house a relative);
- For tenant misconduct.
In the case of reclaiming the property to live in, the owner must make it their primary residence.
They can also house a relative, but that relative must be a spouse, partner, or a direct family member. You can’t just buy a place to let a friend or acquaintance live there.
How to Negotiate with a Tenant for an Early Move-Out?
Negotiating with a tenant for an early move-out from a rented apartment you purchased requires tact and understanding.
First off, know the lease expiration date and whether it has been automatically renewed. This info is crucial because it influences your negotiation options.
Approach the tenant with a clear plan. Propose a mutually beneficial arrangement—like offering a discount on the last month’s rent or covering some moving costs—to encourage the tenant to leave earlier. Make sure to formalize this agreement in writing to avoid any surprises.
It’s also a good idea to openly communicate your intentions and plans for the apartment. Explain why you need it back, whether for personal occupancy or essential renovations. Clear and respectful communication can help build trust.
Sometimes, tenants might have unpaid rent. You could use this situation to your advantage by proposing to waive those unpaid amounts in exchange for a quick departure.
If negotiations don’t go anywhere, you can give notice to the tenant, following legal procedures, including sending a registered letter while respecting legal timeframes. However, consider this option as a last resort, as maintaining good relationships with the current tenant can make the whole process easier.
How to Handle a Tenant Refusing to Leave After Purchase?
Dealing with a tenant who refuses to vacate after buying an occupied apartment can be tricky and requires a careful approach.
When you purchase a rented apartment, be aware that the existing lease continues with you as the new owner. This means you can’t terminate the lease or evict the tenant before the lease expires unless there are specific legal reasons.
If you face a refusal to leave after giving proper notice to the tenant (like wanting to occupy the property or house a family member), it’s crucial to act within the legal framework.
You might consider offering compensation or alternative housing to facilitate the tenant’s departure. If they persist in refusing, legal action might be necessary. It’s essential to consult a lawyer specializing in real estate to guide you through this process.
Make sure to prepare your purchase project considering these possibilities. Engaging a real estate agency or an expert in real estate law can help you evaluate risks and plan accordingly.
Keep in mind that buying an occupied apartment can still be a lucrative investment, and even if complications arise, it can turn out to be a good deal in the long run, especially if you bought it at a significant discount.
Can I Buy a Commercially Leased Property to Live In Myself?
Generally, a commercial lease is for business activities, not residential use. If you're looking to buy a property currently leased under a commercial lease with the intention of living there, you first need to consider the terms of the existing lease. The right of first refusal may come into play, but it usually applies to residential leases.
Converting a commercial lease into a residential one requires the current tenant’s agreement and may involve renovations to make the property suitable for residential use. You also need to consider local zoning laws, which can be stricter in places like Paris.
As the current owner, you have certain privileges, but converting a commercial space into a residence is subject to strict rules and often requires administrative permission.
The real estate market can also influence this decision: sometimes, a property sold at a discount might seem appealing to an investor, but converting it for residential use can be complicated and costly.
In short, while it’s technically possible to reclaim a commercially leased property for personal use, it’s often a complex process that requires careful analysis of the current lease, local regulations, and potential conversion costs. Consulting a real estate expert or a specialized lawyer is highly recommended for tailored advice.
Reclaiming a Rented Property from a Protected Tenant
Certain situations protect tenants, especially if they are elderly or have limited income.
If your tenant is protected, you’ll need to meet stricter conditions to reclaim your apartment. The law grants them more rights. This is particularly true for long-term tenants over 65 with modest incomes.
In such cases, the owner can reclaim the property only if they provide alternative housing. Whether a house or apartment, it must be suitable for what the tenant can afford and located within 5 kilometers.
Of course, if the tenant isn’t paying rent, the owner doesn’t need to find alternative housing. They can terminate the lease without special conditions since the tenant isn’t considered “protected.”
Buying a rented property to live in can be a fantastic real estate opportunity, provided you're well-informed. Since you can’t terminate a lease before it ends, be very attentive to the lease signing dates when you decide to invest in a rented property.
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