Ever wondered how to sell a property while you have tenants? At Woodward Estates, we can lean on decades of experience helping homeowners sell property with tenants to help you sell your home with tenants in situ.
This is our complete guide to selling a house with sitting tenants.
In simple terms, a tenant in situ is someone renting your property when you decide to sell it. If your tenant is renting through a fixed-term tenancy agreement, they are within their rights to remain in situ until the current agreement’s expiration.
Although having tenants in your property provides you as a landlord with a regular income, there are several instances in which you may want to sell the property. For example, you may find yourself in a position where you need to unlock the equity in the property due to unexpected life circumstance change, or you may find that managing a private rental is too much work for you to undertake.
It is generally accepted that selling your property with tenants in situ on an assured shorthold tenancy agreement will devalue your house. Most experts put the figure at around 20 to 25%. Selling with a tenant on a regulated tenancy could have a more significant deleterious effect on the price of your property, reducing it by as much as 35 to 40%.
However, on the flip side, if you have reliable and trustworthy long-term tenants, your property could be a considerable attraction to other landlords and lead to a quick and smooth sale.
Negotiating with tenants can be difficult, so it is a good idea to use all your diplomatic skills when talking to them.
Talk to your tenants before you place the house on the market and explain the reasons for selling. Reassure them it’s not because you want to get rid of them but due to life circumstances and that there would be a good chance of another landlord taking the property on, which could assure the security of their tenancy.
Once your tenants have been notified, it’s time to prepare the property for sale. The following steps will ensure you’re ready to get your home on the market and in the consciousness of potentially interested parties.
Most prospective homeowners will be looking to purchase a property that needs minimal work. Spend some time and a bit of money to undertake running repairs to ensure that the house is in the best possible condition for viewings.
Ensure you have all the correct documentation about your property ownership and governing the tenancy agreement with your current tenants. This should include details of the deposit, gas safety certificate, Electrical Installation Condition Report, Energy Performance Certificate, inventories, and any maintenance issues or rent arrears.
These will be extremely important if you find another private landlord buyer willing to take on any existing tenants.
Think about who your target market is and market the property accordingly. The traditional tried-and-trusted method of approaching your local estate agent is excellent if you’re looking to cast your net as wide as possible to open yourself up to private buyers and landlords. Similarly, using an online estate agent will potentially increase the size of your audience.
Selling an occupied property can attract a different audience, with those looking specifically for buy-to-let opportunities potentially of greater interest to you. It can be beneficial to mention that you have tenants in situ, how long is left on the tenancy and how reliable the tenants are.
Your tenants have statutory rights when it comes to viewings, and a cooperative and collaborative approach will help to smooth the path.
The tenant should be given at least 24 hours written notice before a meeting and give full consent to each viewing at a time convenient for them. If their life is constantly disrupted over time, their right to live in quiet enjoyment may be breached. Tenants may refuse viewings on the grounds of illness or similar extreme reasons.
Organising block viewings rather than scattering them throughout the week is an excellent way to keep disruption to a minimum.
If you end up selling a property while having to evict your tenants, ensure that you follow your legal requirements to the letter. You will need to serve a Section 21 eviction notice with a minimum period of two months to allow your tenants to find alternative accommodation.
Once the terms of the sale have been agreed upon, contracts have been exchanged, and the sale is completed, then any legal responsibility concerning tenants transfers to the new property owner.
Your solicitor should help transfer the tenant’s deposit, which will go to the new owner once the occupancy ends.
One of the best ways of ensuring a smooth process when selling your house with a tenant is to offer them first refusal on purchase. They may have been renting while saving for a deposit to buy their own place, so a deal could be done, providing benefits to all concerned parties.
Are you considering selling a house with tenants in situ in Harrow on the Hill or the surrounding areas in Harrow? If so, contact a member of the team, send us an email, contact us via phone or pop into our office for a consultation at our landmark office at The Old Fire Station, 90 High Street, Harrow on the Hill, HA1 3LP.
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