Lawyers for Selling a Tenanted Property
Selling a Property with Tenant’s Legal Advice
The rights of your sitting tenants must always be acknowledged and adhered to when selling, so it’s important to know the legal stipulations involved when selling a tenanted property.
Selling a Property with Tenants in Situ
You must honour the terms of your tenancy agreement when selling with a tenant in situ.
You do not have the right to evict them from the property unless your fixed-term agreement has come to an end, or you have a viable reason to issue a section 8 notice.
You will typically receive lower offers when selling with a tenant in situ because it is considered a greater risk by both mortgage lenders and property investors.
This is why some homeowners will wait for the fixed term of their tenancy agreement to reach an end before selling the house.
In most cases, you are required to give your tenant at least 60 days’ notice that you are selling the property. This will be outlined in your tenancy agreement.
Some landlords may even offer their tenants a cash incentive to vacate the property, but they are not required to accept this.
What Is the Process of Selling a Tenanted Property?
Selling a tenanted property in the UK involves navigating specific legal and practical considerations.
Here’s a concise overview of the process:
1. Review Tenancy Agreement: Begin by examining the existing tenancy agreement. Different agreements may have varying clauses related to selling the property. Understanding the terms will help you determine your obligations and the rights of both the landlord and tenant
2. Notify the Tenant: The landlord must inform the tenant about the intention to sell the property. This is typically done in writing, and the tenant should be given sufficient notice. The notice period depends on the type of tenancy agreement in place
3. Obtain Consent: If the property is subject to an Assured Shorthold Tenancy (AST), the landlord usually requires the tenant’s consent to proceed with the sale. While tenants cannot unreasonably withhold consent, it’s important to communicate openly and address any concerns they may have
4. Property Valuation: Get a professional valuation of the property to determine its market value. This step is crucial in setting a realistic asking price and ensuring a smooth sales process
5. Instruct a Conveyancer: As the seller, you’ll need to hire a conveyancer or solicitor with expertise in property transactions. They will handle the legal aspects of the sale, including obtaining necessary documentation and ensuring compliance with relevant regulations
6. Sales Listing: Advertise the property for sale, making it clear to potential buyers that it is tenanted. Provide details about the existing tenancy arrangement, including the type of tenancy and the current rental income
7. Offer Acceptance: Once you receive an offer, consider whether it aligns with your expectations. Keep in mind the existing tenancy, and assess whether the buyer intends to retain the property as an investment or occupy it themselves
8. Section 3 Notice: If the property is subject to an AST, the new owner must provide the tenant with a Section 3 Notice. This informs the tenant about the change in ownership and provides details for rent payment
9. Completion: The conveyancer will facilitate the completion of the sale. On completion day, ownership is transferred to the buyer, and the buyer becomes the new landlord. The conveyancer will also handle the transfer of the deposit from the old to the new landlord
10. Informing Authorities: Notify relevant authorities of the change in ownership, including the local council and utility providers. This ensures a smooth transition and helps avoid complications with billing
11. Post-Sale Responsibilities: After the sale, the new landlord assumes responsibility for the existing tenancy agreement. The tenant’s rights remain unchanged, and the new landlord must adhere to the terms outlined in the agreement
Selling a tenanted property in the UK requires careful navigation of legal obligations and effective communication with both the tenant and the buyer.
Engaging with experienced professionals, such as conveyancers and estate agents, can streamline the process and help ensure a successful sale.
Get in Contact with Our Team of Experts
Our team of property law experts will walk you through the process every step of the way making it as efficient, straightforward, and stress-free as possible.
We’re a full-service conveyancing practice with teams covering every conceivable aspect of property law so if you’re looking for assistance with remortgaging, transferring equity, or any other conveyancing issue, we can help.
To chat with one of our property solicitors, you can call us at 0333 433 0275, email us at hello@homepropertylaw.co.uk, or fill in our contact form.
