How to Sell a Property with a Tenant in Place

How to Sell a Property with a Tenant in Place

If you’re a landlord and you’ve decided that the time has finally come to sell the property that you own, then there are a lot of rules and regulations that you need to abide by if there are tenants currently living there.

Here are a couple of points that you should consider to ensure that you obey by the rules when selling a property that has tenants staying there, and avoid getting any serious penalties throughout the process.

Property Viewings

In the original tenancy agreement contract, you should have stated the latest notice that you should be required to give in order to organise a viewing in that property. This should be, at minimal, 24-hours’ notice, so that the current tenants can either make themselves scarce while the viewing is taking place or clean the house prior to your arrival.

However, the bad news is that if you didn’t state the required notice for viewings in the original agreement, then you have no rights to allow the buyers to view the house beforehand. They will have to go by the photos which could make the sell quite a bit harder.

Evicting the Tenant

Just because the house is in your name doesn’t mean that you can evict a tenant just so that you can sell to another buyer. The first option that you have would be to serve notice on your tenants to vacate the property once their tenancy period comes to an end so that it gives them time to find somewhere new to live.

Or, if your tenancy agreement with your tenants is an AST (assured shorthold tenancy) agreement, then you will need to give at least two months’ notice in order to end the current tenancy. This will need to be done through a ‘Section 21’ notice.

For more information about a Section 21, click here.

You’ll need to check the terms of the original contract to check out the first opportunity for serving notice as some ASTs will protect the tenants for their first six months of tenancy.

Rather than evicting a tenant, another option would be to sell the property to another landlord. This would mean that the current tenants would be able to stay put, and the landlord won’t need to spend time hunting for new tenants.

What Happens Once the Property is Sold?

If you do sell the property to another landlord and the tenants are staying put, then they have no rights to evict the current tenants without following the correct process. The only difference on the original tenancy agreement will be the name of the new landlord.

The new landlord should write a formal letter to the current tenants to let them know that they are now going to be their new point of contact, and to explain how the rent payments should be altered.

Plus, the new owner must also contact the Deposit Protection Service so that the deposit can be transferred over. Tenancy protection has been compulsory since 2007 in England and Wales, so failing to protect the tenant’s deposit could result in some serious fines.