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We understand that, for many landlords, selling an investment property with tenants in situ can often be complicated and stressful. The rights of your sitting tenants must be acknowledged and adhered to when selling, so it’s important to know the legal stipulations involved when selling a rental property.
At WeBuyAnyHome, our team of industry experts have vast experience in investment property sales, and have purchased numerous buy to let properties, which means your property sale is in safe, knowledgeable hands.
Whilst selling a property with tenants can be more effort than usual, there are many good reasons for why a landlord may want to sell their rented property. It’s believed that more than a quarter of landlords are looking to sell at least one investment property this year. It’s important to consider the motivations below if you are considering selling.
The Section 24 Act
This legislation means that landlords can no longer deduct mortgage interest and other finance costs (including mortgage arrangement fees) from their rental income before tax. This has left many landlords out of pocket and eager to sell.
In a bid to wipe out “slumlords”, the government has introduced a whole host of new regulations to improve standards in private renting. Rules such as stricter energy efficiency requirements, electrical certifications and selective licensing mean that the costs of renting out property has increased, cutting in to profit margins.
For many, the COVID-19 19 pandemic have exposed the shortcomings of their living spaces. Whether motivated by a lack of space for homeworking, no access to a garden in the middle of lockdown, or simply fatigue from spending much of 2020 inside, many renters are looking to move. Landlords in the major cities are set to be most heavily impacted by this, as remote working and desire for more greenspace is seeing mass renter movement to rural areas.
Releasing locked equity
Many landlords choose to sell rented properties to simply free up their investment. With the financial impact of the COVID-19 19 pandemic hitting many, it is anticipated that more landlords will look to sell off their portfolio in the aftermath.
Since the Grenfell Tower tragedy in 2017, it is now mandatory for buildings with cladding (or other fire hazard features such as wooden balconies) or over a certain height to be given a formal safety review. If you own a leasehold on a tenanted flat, you may find it very difficult to sell because the freeholder of the building may not be willing to pay for the safety review. Or they may charge you to complete this review. The situation can be even worse if the property you own is in a council owned building, as councils rarely wish to incur any costs for the benefit of a private leaseholder. However, as we buy with our own funds, we can buy flats in these situations.
Regardless of what your reason is for selling, at WeBuyAnyHome, we can purchase buy to let properties in as little as 7 working days.
Yes, you can sell a property with sitting tenants still in occupation. However, doing so can make a sale more difficult. There are two ways of selling a buy to let property with tenants.
Sell your property to another landlord
A great benefit of selling your property to another landlord is that your tenants won’t be required to move out. The assured shorthold tenancy agreement that you have in place with your tenants can simply be transferred. The new landlord will be required to honour the existing terms for the remainder of the tenancy. A second benefit to selling to a landlord is that you won’t lose out on income in the lead up to the sale.
Sell your property to a regular buyer
You can also sell a rental property to a regular buyer who will live there once the sale is completed, however this can be more complex. If you have an Agreed Shorthold Tenancy agreement, you can provide notice to your tenants by serving a Section 21 notice. You will need to wait for this notice to expire before your property sale can complete. If you have followed all the terms stipulated in the Agreed Shorthold Tenancy Agreement, yet your tenant refuses to leave the premises, you may have to initiate the eviction process.
Either way, at WeBuyAnyHome, we can purchase properties with tenants in. We adhere to existing tenancy agreements, meaning your tenants won’t be impacted. Many of the properties we purchase remain as buy to lets, as we often sell properties to investors who are eager to expand their investment portfolios, or rent the properties ourselves.
An Assured Shorthold Tenancy Agreement is a legally binding contract that gives tenants the right to exclusive use and enjoyment of the rental property and provides a minimum term for which the tenant can stay in the property without fear of eviction. An Assured Shorthold Tenancy Agreement should not impede a sale, however certain stipulations can impact the usual selling process.
Any prospective buyer will likely want to view the property before they make an offer. However, opening the property to viewings may breach the tenant’s right to “Quiet Enjoyment” – this is the tenant’s right to live in the property undisturbed. Unless the agreement specifically states otherwise, you won’t be able to conduct viewings unless you have express permission from your tenants. How easy or difficult this is depends on the relationship you have with your tenants in situ.
At WeBuyAnyHome, we don’t require viewings to purchase your property – this is a reason why so many landlords use our service.
Before selling a property, some homeowners will choose to refurbish the property in order to attract buyers. This might be a fresh lick of paint to brighten up the place, or more significant work, such as refitting a kitchen or bathroom. However, landlords are more limited to the improvements they can make if the property has sitting tenants. The tenants’ right to “Quiet Enjoyment” means you will not be able to complete any work unless they grant you access. Again, the complexity of this issue depends on the relationship between landlord and tenant, as well as how disruptive the refurbishments are likely to be.
At WeBuyAnyHome, we purchase homes in any condition. This means you don’t have to worry about gaining access to the property to update fittings and fixtures. We can buy the property directly from you, with tenants in situ.
Terminating an agreement
Selling through an estate agent or on the open market means that a homeowner cannot control who does or does not want to purchase the property. It is not guaranteed that you will sell to another landlord. Should a home buyer wish to purchase the property to live in, the, of course, your tenants will be required to leave. How long this process will take is entirely dependent on the terms of the tenancy agreement. Subject to the buyers time requirements, a long notice period could dissuade them from following through with the sale.
At WeBuyAnyHome we can offer a guaranteed sale for properties with sitting tenants. We won’t require you to terminate the tenancy, meaning you don’t have to disturb and uproot you tenants in order to appease a buyer and achieve a sale.
Some land lords are eager to sell their buy to let properties because of problem tenants. Tenants might be refusing to let prospective buyers enter the property, behaving unreasonably or have left the property in such a state that no one may be willing to buy it. At WeBuyAnyHome, we purchase properties with problem tenants, and will also buy your property no matter what the condition.
Each stage of the flat selling process is highlighted below to give you an overview of how simple and fast our service is. You could have the cash in your account in as little as seven days.
Absolutely Amazing! These guys have been brilliant from start to finish, made our transition to our dream home possible. After we had potential buyers retract their offer on our house for sale several times We Buy Any Home were able to make our dream come true and we were able to secure our perfect house knowing we had a secure offer for our previous property. Cannot recommend them enough.
Brilliant service. I needed to sell my dads house to pay for care home fees and this company was brilliant from start to finish. No hassle and completion was really quick. I would thoroughly recommend them and have already told friends who need to sell quickly about my experience.
I shopped around a lot before finally settling on We Buy Any Home. I felt most comfortable with them after speaking to multiple cash-buying companies. You hear horror stories about similar companies but I can confirm that this company really was fantastic. I knew I was ready to take a slight loss on the property, in exchange for a quick sale and no hassle. They offered a great, hassle free service and I have no regrets in my decision to choose this company over others.