There’s nothing to stop you selling a home that’s being rented out to tenants, however it’s a slightly more complex process because you need to take their rights into account. Here we look at some of the things you need to consider when you have tenants in situ.
Reasons to sell
There are lots of reasons a landlord might want to sell while their tenants are still in place. Perhaps they need the cash for another investment or want to coincide the sale with the end of their tenants’ agreement. Maybe they just no longer want the hassle of being a landlord.
Alternatively, you may have inherited a tenanted property or wish to sell one that is jointly owned during a divorce. If you’re keen to do this quickly, our service is based on buying homes with as much speed and as little fuss as possible, including those in sensitive scenarios involving divorce and inheritance.
Your tenants’ rights
It’s likely your tenants will have signed a fixed term assured shorthold tenancy (AST) allowing them to live in the property for a certain amount of time. As long as they have stuck to the terms of that contract, such as paying their rent on time, you cannot force them to leave before it ends. If the fixed term contract has ended, the contract is periodic (it rolls over each month for example) or their contract has no fixed term, you need to give tenants at least two month notice.
Although the official notice period is usually two months, it’s a good idea to tell your tenants as soon as you decide to sell and let them know who you are selling to. If they need to leave when the sale completes, give them as much notice as possible.
If a landlord is buying your home, discuss with your tenants if they’d like to stay on. The AST they signed with you remains valid until the end of the contracted term, so they have a right to remain in the home after you’ve sold it if they choose to.
Selling to a landlord
It may limit your pool of buyers but it’s often more straightforward to sell to another landlord. They’re likely to be pleased to have tenants in situ since it means they won’t have to find their own and will start earning an income immediately. What’s more, you’ll be paid rent right up to completion. There will also be less disruption for all involved since nobody will be moving in or out.
Selling to a buy-to-let investor is often a quicker process too. If they’ve decided the figures stack up, they’ll be keen to start earning an income from the property. But you’ll need to provide extra paperwork during conveyancing. This includes:
- A copy of the signed tenancy agreement.
- Gas and electricity safety certificates.
- Copies of any legal notices you’ve had to serve on the tenant, for example an eviction order.
- Details of current repairs or requests for repairs.
You’ll also need to confirm how their deposit has been protected and how it can be transferred to a new landlord. The deposit protection scheme you’ve used will be able to tell you exactly what’s needed and how to do it.
Selling to the general market
If you’re happy to sell to general buyers this will widen your market. Your tenants will need to have left by the time the transaction completes. Ideally, they will leave a little before this date so you can check the home is in a reasonable state and at the standard your buyers expect.
If you haven’t sold your home by the time tenants leave this will give you a chance to add touches that’ll make it more appealing to potential buyers. Although, if you have a mortgage on the property you won’t be bringing in any rent to cover it during this time.
Keeping tenants on your side
Whoever you sell the home to the best way to make sure that sale goes smoothly is to build a good relationship with your tenants. They are a key part of the process and you’ll need them to agree to estate agent visits and viewings from potential buyers.
By keeping them well informed and respecting their rights, they’re more likely to leave the home clean and tidy for those viewings. You could consider offering your tenants incentives, such as reduced rent during the time the home is being sold. Or, if they are keen to leave, agree to let them go before the end of their fixed term contract if they find a new property they like.
Working with us
We buy houses of all shapes, sizes and values, including tenanted properties. We’re experts at buying homes quickly and have been doing it across the UK for more than 30 years.
If you have a buy-to-let property that is empty and costing you money we can buy it in just seven days. If you have tenants on site we can arrange to complete the sale on the day they leave, so that you don’t have to continue paying a mortgage when you’re not generating an income from the property. And because we buy using our own cash funds we’re never tied to an unpredictable chain of buyers that could fall through. When we tell you a completion date we’ll stick to it.
If you’re selling a house with tenants and think we could help, please get in touch.