I am considering selling my house that has been rented out for a year, and current lease ends Dec. 31, 2007. The house is currently managed by a property management company, which is also a realtor. The house is in Ontario, Canada, but I am in the US.

If current tenant is willing to buy, can I just negotiate with the tenant without the property managemnt agent/realtor, so that I don’t need to pay them anything and still be legal?

If current tenant doesn’t want to buy, can I start selling it now and put the closing date as Jan. 1, 2008? Then I guess I will need current tenants coordination if potential buys want to take a look first. Is this possible at all, or do I have to wait for the tenant to move out before I start to sell? I worry that my house will suffer from Canada’s tough winter if the tenant moves out before Jan/08 but it takes us months to find a buyer to move in. Should I also let the property management company be the realtor?

Not sure what to do. Any suggestions?

Your agreement with the property manager should address sale to the tenant and whether you owe anything or must list with the management firm to sell.

The typical philosophy of real estate companies who provide property management services is that the tenants they place are potential customers and good credit risks through their efforts – therefore the company is entitled to some compensation for bringing a willing and able customer to the table. In real estate lingo, this is known as "procuring cause". For that reason, most companies will include some language in their management agreement either entitling them to list the property for sale, participate as the tenant’s agent, or assess a fee to the landlord for selling to a customer they procured.

I also agree that it would be difficult to do a "for sale by owner" over a great distance – and you do want the exposure a local real estate agency could provide in most cases. Check your management agreement and weigh your options.