As a landlord, there may come a time when you need to sell your buy-to-let property, for whatever reason. Perhaps you can no longer meet the mortgage payments, maybe you are moving abroad and no longer want to be a landlord in the UK, or perhaps the time is simply right to sell in a buoyant market –possibly to realise a capital gain. Whatever your reasons for deciding to sell a tenanted property, there are some things you will need to consider, to make sure you don’t fall foul of the law (and to keep your tenants happy).
Communication is key
Whether your tenants have been living in your property for 6 months or 6 years, it is a good idea to discuss your intentions to sell the property with them as soon as possible. This means that they will be aware of what is happening and gives them the option to hunt for new accommodation, if necessary. Failing to discuss plans to sell with your tenant could leave them in for a nasty surprise!
Landlords should bear in mind that they do not have the right to evict tenants just because they want to sell their property. You could use a Section 21 notice to evict tenants, but this process can take several months, or you could sell your property with tenants in situ, although you may find this decreases the value of your property somewhat. On the other hand, if demand for the property in question comes mainly from investors, selling subject to an existing tenancy could maximise value. A professional Estate Agent will advise you on the best route to market. This will include advice as to the most appropriate method of sale – either Private Treaty or Public Auction.
Landlords do not have the right to conduct viewings with prospective purchasers whenever they like. The current tenants must be given at least 24 hours’ notice in writing of any proposed viewings, and landlords should ensure that the tenancy agreement allows viewings to be conducted. If there is no mention of this in the tenancy agreement, it is entirely up to the goodwill of the tenant whether or not they decide to allow viewings (which is why it pays to maintain a good relationship with your tenants). Even if the tenancy agreement does mention viewings, tenants have a right to refuse access for viewings taking place at times inconvenient to them. Arranging too many viewings could disrupt your tenants’ rights to ‘quiet enjoyment’ of the property.
What happens when the property is sold?
Tenants may have questions for you, as a landlord, as to what happens after the sale of the property. When your property is sold with tenants in situ, the purchaser becomes the new landlord of the tenants. Tenancy agreements are still valid even though the landlord’s name has changed. Whilst it is a good idea for the purchaser to have new tenancy agreements drawn up, tenants are under no obligation to sign a new agreement, particularly if it takes away any previous rights they were entitled to (such as keeping pets in the property). At the very least, the purchaser should write to the tenants with the new landlord details and information relating to payment of rent. A professional letting Agent will notify the tenant of the new landlord’s address for Service of Notices pursuant to Section 48 of the Landlord & Tenant Act 1987.
Selling a tenanted property does not have to be a headache for landlords, provided they are aware of their legal obligations.