When a landlord decides to sell a currently rented property, it’s natural for tenants to feel uncertain and concerned. However, having a clear understanding of your tenancy rights is not just crucial, it’s empowering. It equips you with the knowledge to navigate the selling process, providing a sense of control and reducing anxiety. While the landlord has the right to sell, tenants have certain rights that are designed to protect them during this process.
This blog will explore some fundamental questions tenants have about their rights when their landlord is selling.
Am I required to move out when my landlord wants to sell?
Tenants are not automatically required to move out because the landlord decides to sell a tenanted property. The tenancy agreement, a crucial document, and rights can remain binding on the new owner if the property is sold. It’s important to remember that this agreement provides a legal framework for your stay and protects your rights as a tenant.
Can I be evicted when my landlord sells?
Landlords can evict tenants simply because they intend to sell, in a process known as ‘no-fault’ eviction. However, specific criteria must be met for this to be possible. For example, tenants with assured shorthold tenancy agreements—the most common type—have a right to remain in the property for the entire contract length. The new owner will take on the existing tenancy.
However, if the fixed term has ended and the landlord wants to sell with vacant possession, they can serve notice by the tenancy terms. Usually, a Section 21 no-fault eviction notice gives tenants two months to vacate the property. But landlords cannot just cut tenancies short because they are selling.
Can I contest an eviction notice?
If tenants feel that the landlord is evicting them early or unfairly because of the sale, they have a recourse. They may be able to contest a Section 21 or Section 8 eviction notice. This process involves challenging the validity of the notice, which could be due to reasons such as not giving the entire two months’ notice or not meeting other requirements. This reassurance of a legal recourse can help tenants feel more secure in their rights.
You can contest an eviction notice if:
- The Section 21 notice is invalid because it does not give the entire two months’ notice or meet other requirements.
- For example, the landlord has acted unfairly or unlawfully in serving notice by discriminating against tenants.
- The property is in serious disrepair, and it would be unreasonable to evict tenants before issues are fixed.
Tenants can seek legal advice and write to the landlord explaining why the notice is invalid or unfair. The landlord may reconsider, or tenants can raise a defence if an eviction claim goes to court. However, contesting a no-fault Section 21 notice is easier if issued correctly.
Can I prevent my landlord from selling the property?
In most cases, tenants cannot prevent their landlord from selling their rented home. Landlords have the right to sell their investment properties.
Some tenants may take steps intended to delay, complicate, or deter a sale by:
- Refuse access for viewings, making it harder to sell. But, this could antagonise the landlord.
- Raise a disrepair claim, requesting urgent repairs before the sale. This can slow down the process.
- Apply to the local council to restrict permitted development rights on the property. This removes the automatic right for the buyer to make specific changes.
- Apply for a new statutory tenancy when the fixed term ends, although this only applies to a few longstanding tenancies.
It’s important to understand that tenants have limited power to stop a landlord from selling.
However, once notice is served, tenants can take comfort in knowing that they have the right to contest an invalid notice or negotiate a better outcome with the buyer. This understanding of the situation can help tenants manage their expectations and feel more in control of their circumstances.
Do I legally get first refusal on my landlord’s property?
Landlords have no legal obligation to offer their tenants first refusal to purchase the property themselves. Tenants only have a ‘right of first refusal’ to buy if this is included in the tenancy agreement, which is very rare.
Without an explicit contractual right, tenants have no automatic rights to buy their rented home before it goes on the open market. Landlords can sell to whomever they choose through an estate agent.
Some landlords may be open to selling directly to a tenant but have no legal duty. Tenants may want to negotiate with the landlord before it is advertised, but the landlord has no obligation to accept any offer tenants make.
Why are lots of UK landlords selling their properties?
Research shows that an increasing number of small-scale landlords are choosing to sell their properties and exit the market in recent years. There are a few likely reasons for this trend:
Stricter tax rules
Changes to mortgage interest tax relief have increased landlord costs, making letting less profitable. Selling allows landlords to release assets and reduce tax bills.
Increased regulation
New laws around safety, property conditions and licensing have increased obligations on landlords, making letting more risky, complex and expensive.
Poor returns
High property prices coupled with stagnant rents in some regions mean lower landlords’ yields, prompting them to take profits by selling.
Economic uncertainty
The prospect of higher interest rates and recession risks make landlords wary about investing further. Selling lets them withdraw equity.
While this can disrupt tenants when landlords sell up, stronger regulations aim to drive up standards in the rental sector. Most tenants still prefer the flexibility of renting than buying their own home.
Do I have to comply with house viewings?
When a property is sold, the landlord or estate agent will want to arrange viewings to market the home. Tenants’ cooperation is required to provide access, but they have rights.
By law, landlords must give tenants at least 24 hours’ notice before entering the property to conduct viewings when tenants live there. The notice must specify the exact time access is required.
If the visit is at short notice or unsuitable, tenants can:
- Propose a different time for the viewing
- Request to be present during the viewing
- Refuse access if 24 hours’ notice is not given, although obstructing reasonable access could lead to eviction.
Tenants do not have to keep the property in any particular condition for viewings beyond their contractual obligations, and landlords cannot expect tenants to make additional preparations.
Tenants should aim to compromise on convenient viewing times. If landlords want vacant possession for open house viewing after tenants leave, this would only be by mutual agreement.
Is my new landlord allowed to increase the rent?
In most cases, a new landlord cannot unilaterally impose a rent increase immediately after taking ownership of a property. They must inherit the existing tenancy on the same terms. So, during any fixed term, rents can remain the same.
However, once the fixed term ends, the new landlord can seek to increase the rent.
To increase rent, a landlord must:
- Serving any contractual notice to increase the rent – usually 1-2 months
- Landlords should ensure the proposed new rent is realistic and aligned with local market rents for comparable properties. Significant increases could risk a referral to a rent tribunal.
- They negotiate with the tenant if they are unhappy with the proposed increase.
Tenants who receive a new tenancy agreement with increased rent can try to negotiate, provide evidence if the rent is excessive, or challenge any unfair practices before accepting or rejecting the new terms. They may also look to move elsewhere.
Other rights that tenants have during the selling process
Beyond the critical questions covered already, other tenant rights and considerations during the selling process include:
- The landlord must follow proper protocols for accessing the property for valuations and viewings. They cannot interfere with tenants’ reasonable enjoyment of their home.
- Harassment of tenants to make them leave early is unlawful. Tenants can report coercive behaviour to local trading standards.
- If tenants have not been informed via a notice, they must be given direct contact details for the new landlord or agent after completion.
- Any deposit must be transferred to the new landlord’s or agent’s custodianship. Tenants should ensure this is carried out correctly.
When signing a new agreement, tenants should check for unfair terms or excessive agency fees, as it may be possible to negotiate improvements. Click on the link to read our blog on this subject for guidance on a landlord’s rights when selling a tenanted property.
