This is a typical question we get asked all the time – how do you go about selling a property with tenants in it? In this blog post, we will take a look at how to go about it, how easy or difficult it is, and indeed whether it can be done at all!
We will start with whether it can be done at all….the good news is, for those searching, that the answer is a definite yes!
We are happy to buy properties or portfolios with tenants in situ.
If you are the landlord and legal owner of a property, you can go ahead and sell your house with tenants in it (tenants in situ, to use the correct legal terminology). If you would like to speak to one of our expert team about this then click here to contact us.
There are, however, a whole number of things to consider when doing this – and here is a helpful list of 10 of them:
- Are the tenants in rent arrears?
You will need to declare this to any prospective purchasers. This will be something that will put off smaller purchasers and amateurs, because a broad skillset is needed to take over a problem property. The downside from your perspective may be leaving the property on the market for some months, with very few people being interested in it.
- How old is the tenancy?
Sometimes we see situations with tenancies that are many years old, and are still governed by the laws when the tenancy was signed. This sometimes gives a lifetime right to a tenant, and can even be a hereditary right that passes down to their children/the next generation! These bring ever more complications, because the rent is often “controlled”, set at a much lower rate than the market today, sometimes even zero! This needs to have a professional involved in the transaction.
- Are you the only owner of the property?
If you are not, then your partner or other party named in the transaction also needs to sign all of the documents and agree to the transaction. You cannot act for someone else without a full power of attorney, so all of the sellers need to be on board when selling a house with tenants in it.
- Are all your compliance documents up to date?
These days it is a legal requirement for landlords to have undertaken Electrical condition reports, Gas safety certificates for properties with gas supplies, energy performance certificates as well – and that is just the start! Are your compliance documents in place? If not, then if selling the property through an estate agent the transaction is very likely to either fall apart and not complete, or go through at a much lower price when the prospective purchaser finds out. Better to be honest and up front about all of this from the start!
- Does the house need a licence?
This might be a licence for an HMO (House in Multiple Occupation) or another kind of licence in selective, or additional, or other licensing areas as defined by the local authority and/or central government. Fines for non-compliance here can be in the many thousands of pounds, and so again this needs to be addressed up front and transparently when selling a rental property with a tenant (or tenants) in it.
- Can I not just evict my tenant and sell the property?
The answer is yes, in some of the circumstances above – however, evictions can take up to a year under normal conditions and many landlords are trapped under the Coronavirus Act 2020 and cannot seem to evict tenants at all – so the answer here, realistically, is that if the tenant consents to this, then yes you can – if they don’t, you are likely to need to look at other options.
- Can you grant people access to view the property?
Remember the tenants have the right to quiet enjoyment and as such, may not want lots of prospective purchasers walking around the property. Particularly during or after a pandemic, because of the obvious risks to everyone of doing this. Having no access for purchasers can dramatically impact the price you will achieve for your property, unfortunately.
- How quickly will you be able to achieve a sale with tenants in situ?
Sometimes, these properties can be on the market for a long time. It is OK if you can sit back and simply collect rent and are making some money every month – however, it is when something changes that a fast disposal at a guaranteed price might be a better solution for you. This is something we can help with.
- How does having a survey work with tenants in situ?
The real answer here is that it is quite difficult! If the tenants are onside, and helpful – then it should be quite easy; however, if they are not, it is one of the things that can get in the way of you successfully selling your house with tenants in.
- Does selling a property with tenants mean I cannot sell quickly?
No, not at all. There are a limited number of buyers for these sorts of properties, but we can act to give you a transparent and fair offer for the property to complete in as little as 7 days, if that is the timescale you are seeking to achieve.
Selling a property with tenants in situ can be frustrating and slow! So, if you would like a Quick and Simple Solution, then leave us a message on our contact form and we will be in touch to help you with achieving the best outcome when selling a rental property with tenants in it!
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