Piim Property Management

Options for selling your tenanted property

There are 2 options available to Landlords who are considering selling a property with tenants. Either selling a house with tenants in situ or evict the tenant and selling on open market.

Option 1: Sell the traditional way

The main benefit of selling a vacant house is a larger amount of potential buyers. With selling an empty property, you will have time to make the property presentable. It also allows you time to deal with any repairs and renovations that may be needed.

To legally evict tenants, a Section 21 will be needed after the fixed term has ended, or if you have necessary grounds for eviction, a Section 8 will suffice.

Its worth remembering, the property is the tenant’s home and this news may come as a surprise. It will help to notify them, as early as possible, of your intention. Explain your situation to try to keep things amicable. Once the notice period has expired and the tenants have left, you will have the opportunity to prepare for market and sell – but the process can take many months.

Option 2: Selling with sitting tenants

It can be appealing to try to sell this way to save disruption, time and money. This will give your tenants some security.

In this situation, the tenancy agreement simply changes hands to the new Landlord who is bound by the terms of the agreement. The tenant retains their legal rights and any right shown in the agreement that they has previously.

The benefit of selling with a tenant in place, means you can not only retain your income until the sale completes but it can be a quicker method of selling your property. Both tenants and Landlord will not have to go through the stress caused by eviction.

The drawback, however, is the reduction in the amount of potential buyers to buy-to-let investors. You will also still need to respect your tenant’s quiet enjoyment whilst arranging any viewings.

It’s worth noting – investment properties are normally subject to capital gains tax, which you may be liable for when selling so ensure due diligence is done so you are fully aware in advance.

The new buyer will want to see all safety certificates and paperwork is in place. This will include Gas and electric safety certificates, any details of protected for transfer, evidence of a tenant’s Right to Rent, and a signed Tenancy Agreement.