I want to sell my flat but I've currently got tenants in my property- Can I sell the flat to an investor with the tenants still in occupation?
If you decide that you want to sell the property while the tenants are still within the timeframe of the tenancy agreement there are a few options that you have.
If you are selling the property to someone who wants to buy the property with tenants then there would be no upheaval for the tenants- they would have the comfort of knowing the existing tenancy agreement would be honoured for the remainder of the tenancy. Alternatively, if you need to sell the property 'vacant' , It may be that you are able to come to an agreement with the tenants to terminate the tenancy early by offering some level of compensation, of you'll need to make use of the ' break clause' to gain possession, or wait till the end of the tenancy if there isn't one. As a landlord it may be also worth considering offering the existing tenants a reduction in rent in order for full cooperation during the sale, in keeping the house in good order while the viewings take place and to compensate them for the inconvience viewings may cause
It is completely possible to sell a property with tenants 'in situ' -the sale is just handled in a different way. Usually a property will be sold with a term expressing 'vacant possession on completion of the sale', however, if you sell to a buyer who is willing to take on the tenants then the contract has to include an express term stating that the sale is subject to the tenancy being in place. It may seem like a complicated process to sell or buy a rented property with an ongoing tenancy but your solicitor/conveyancer will be familiar with handling such cases and should be able to provide you with expert advice allowing the transaction to run smoothly.
When selling a property with tenants the following should happen:
- A copy of your Assured Shorthold Tenancy agreement should be annexed to the contract.
- Your solicitor should give the buyer a copy of an inventory or schedule of condition relating to your property.
- Details should be handed over about the relevant deposit protection scheme and the new landlord should register an account with such a scheme. Any deposit monies that you hold should be passed over to the new owner/landlord or, if held in a custodial scheme, the monies should be transferred into the name of the new landlord.
- You will need to serve a notice on your tenants advising them of their new landlord and let them know where their rent should be paid once the sale has completed.
- Proof of all of the above must be provided to the buyer's solicitor.
- If requested you are obliged to provide details to the buyer of any issues you may have had with the tenants i.e non payment of rent.
17th June 2015
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