Selling A Buy-To-Let Property With Sitting Tenants

The Cedar Crest Team
Apr 18
3 min read

Selling a property can be an intricate process, and this complexity is amplified when trying to sell a property with sitting tenants. Whether you’re considering moving your investments or exiting the rental market altogether, navigating this situation requires a clear understanding of your rights and obligations as a landlord.

A vital consideration is that you cannot evict sitting tenants simply because you wish to sell the property. Instead, you’ll need to choose between selling with tenants in situ or ending the tenancy before proceeding with the sale. Each option has its own set of requirements and implications.

UNDERSTANDING YOUR LEGAL RESPONSIBILITIES

If you choose to sell a currently occupied property, the sale can proceed, but you’ll be transferring specific responsibilities to the new owner. The sitting tenants’ tenancy agreement remains valid, and the buyer will automatically become the new landlord. It’s vital to ensure the tenancy agreement reflects this change by updating the landlord’s details as soon as possible. Although this can be achieved smoothly, be prepared for situations where tenants refuse to sign an updated agreement.

Conversely, if you decide to sell the property as vacant, you must follow proper legal procedures to terminate the tenancy. Utilising either Section 21 or Section 8 of the Housing Act 1988, you must provide written notice to your tenants. Section 21 requires at least two months’ notice and is typically used when no particular fault lies with the tenants. Meanwhile, Section 8 is reserved for specific circumstances, such as rent arrears, illegal activities on the premises, or a break clause within the tenancy agreement. Seeking professional advice before serving such notices is highly recommended to avoid missteps.

SHOWING BUYERS AROUND THE PROPERTY

Showcasing your property to potential buyers is another aspect where tenant cooperation is crucial. You generally cannot show prospective buyers or tenants the property unless this is explicitly addressed in the tenancy agreement. Even in such cases, you are required to provide at least 24 hours’ notice in writing. If the agreement does not permit property viewings, you must secure the tenants’ permission beforehand, establishing a clear communication channel. Respecting their privacy and ensuring minimal disruption will go a long way in maintaining goodwill during the selling process.

THE ROLE OF NEW LANDLORDS

When a property with sitting tenants is sold, the new owner inherits the role of landlord and all associated responsibilities. Existing agreements remain binding, making it crucial for the new landlord to communicate changes effectively. While some tenants may willingly sign fresh agreements reflecting the new landlord’s details, others may decline.

If this happens, it’s important for the new landlord to provide written documentation outlining their details, including payment instructions for rent. Whether you’re the current owner or the incoming landlord, ensuring a seamless transition protects both parties’ interests and preserves the integrity of the tenancy. Buyers investing in properties with tenants are often familiar with these processes, but clear communication remains key.

SEEKING ADVICE FOR A SMOOTH PROCESS

The interplay of property law and tenancy agreements can make selling a buy-to-let property with sitting tenants a nuanced task. Understanding your legal responsibilities, consulting professional advice where needed, and maintaining transparent communication with your tenants are critical steps in ensuring a stress-free sale. If you’re a landlord planning to sell your property and need further tailored guidance, professional support can ease your concerns and equip you with the tools to handle the process confidently. Expert advice can make all the difference whether you’re navigating legal notices or discussing agreements with tenants.

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Whether you’re exploring your options, need expert advice, or want guidance every step of the way, our team is ready to provide personalised support tailored to your unique situation.

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