Selling a property with a tenant: Your options as a landlord explained

Whatever your reasons for deciding to sell your investment property, there will be key decisions to make regarding the tenants.

Selling a property with a tenant can be both a positive and a negative - depending on what you decide to do and your approach to doing it.


Can I sell my property with a tenant?

Yes you can. But should you sell your buy-to-let property as an investment to another landlord with sitting tenants, or do you go through the process of removing your tenant(s)?

Either option could help your sale, yet both options are potentially fraught with issues. CJ Hole has put together this key guide to help you when selling a rental property with a tenant.


Selling a tenant-occupied property

Selling a property with a tenant can certainly save you money in the short-term.

On average, properties currently take 102 days to sell. That's an awful lot of time with no rental income should you choose to sell your buy-to-let property only once it has been vacated.

Keeping tenants in place while you go through the sales process can ensure a steady stream of income during an expensive process.

But the logistics around selling your investment property while your tenants are still in situ should not be underestimated.


Benefits of selling a tenanted residential property

Selling your buy-to-let property to another investor with the tenants remaining under the terms of an Assured Shorthold Tenancy agreement can put you in a strong position.

Not only will you continue to reap the benefits of regular rent, if you have good tenants with a blemish-free renting history, that can be hugely appealing to landlord buyers.

And why would't it be.... they will reap those same benefits from day one!

Your contract of sale with the buyer should state that the tenants will remain and should also contain their names, the terms of their tenancy and the rent they have paid.

However, selling with tenants in situ is not a regular property transaction, so it can pay to engage a solicitor or conveyancer with solid experience of getting sales like these over the line.

And don't forget the protected tenancy deposit... this will need to be transferred into the name of the new landlord if you are selling with tenants in situ.


Pitfalls of selling a tenant-occupied property

While your tenants will eventually be grateful for the security of their ongoing tenancy with a new landlord, it's important to keep them happy during the sale process.

Your tenants could become fed up with having to accommodate viewings of your property. Ensure you give them plenty of notice, usually 24 to 48 hours under the terms of most tenancy agreements, before a viewing is scheduled to take place.

If your estate agent is conducting viewings on your behalf, ensure they book them at convenient times that suit your tenants.


Can I evict a tenant to sell my property?

If you decide to sell your buy-to-let property while your tenants are living there, but need it to be vacated by completion of the sale, you will need issue a section 21 notice.

Under Assured Shorthold Tenancy agreements, this gives the tenants two months' notice that you wish to end the tenancy.

While you do not have to provide a reason for issuing the notice, informing your tenants of your plans can help keep the lines of communication open.

Selling your property as vacant will open you up to a wider selection of buyers.

And while deciding to wait until after your tenants have moved out before you market the property for sale can be costly with no monthly rent coming in, it can give you the opportunity to undertake maintenance and repairs, thus giving the property a better chance of a quick, asking price sale.


Pitfalls of selling your property as vacant

Telling your tenants that you are selling up and issuing a section 21 notice is never easy.

There's a strong chance your tenants will be unhappy at being given notice and this could impact on their goodwill levels when you wish to show round potential buyers.

You are relying on them to keep your property clean and tidy and presentable to buyers. They are less likely to comply if they feel aggrieved at your decision to sell up.


Things you should do as a landlord

The key, whether you are selling with tenants in situ, selling up during a tenancy or evicting your tenants before you sell, is communication.

Don't just simply put your buy-to-let on the market and let your tenants sit back and watch the 'For Sale' board go up.

Speak to them before you do anything and explain what you are planning to do and why you are doing it.

If you are planning to sell to another landlord, explain that there's a strong chance their tenancy will simply continue. Reassure them if you can.

If you are selling and are issuing a section 21 notice, but need them to accommodate viewings, consider reducing their rent until their tenancy comes to an end as an incentive to be accommodating and keep the property in good order.

And, most importantly, if you are issuing a section 21 notice with a view to selling the property empty, be honest and up front with your tenants and, again, try to reassure them. If they have been good tenants, promise them a glowing reference for their next tenancy.

You could even give them the opportunity to buy the property before it goes on the market...



If you are thinking about selling your tenanted property, get in touch with your local CJ Hole office who will be happy to offer their advice.

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