If you’re a landlord you may wish to sell property to reduce or diversify your portfolio, but this may be an issue if you have sitting tenants. Yet here at Open Property Group, we make light work of selling a property with tenants and you can sell without affecting the rights of sitting tenants in any way. Let’s take a closer look…
It is important to note that if you have property for sale with tenants, you cannot just evict them to make it easier and quicker to sell your assets. To cash in on your investment, you either have to wait for the tenancy period to end, or sell the property with the tenants still living there.
It can be very difficult to go through an agency as a way of selling a buy-to-let property with tenants. If the sitting tenant finds out about the impending sale, they may see it as not being in their interests to cooperate. As a result, they could make it impossible for you or an agent to show around prospective buyers.
In fact, tenants are only obliged to allow viewings if this is expressly stated within the tenancy agreement. If the contract does permit viewings, the tenant could still only allow them to take place at times that they deem convenient.
Even if the sitting tenant does allow viewings, they may neglect to ensure the property is clean and tidy for viewers. This in turn could make the property less attractive for potential buyers and harder to sell as a result.
If you conduct a lot of viewings, you may find yourself in breach of their ‘covenant of quiet enjoyment’. The law defines such a breach as harassment under the terms of the Protection from Eviction Act 1977 and is therefore a criminal offence. By law, you must also give tenants 24 hours’ notice before viewings are due to take place.
The person buying a property with tenants becomes the landlord when the process is complete. The tenants have the same rights as before the sale, and the new owner has no right to evict them to make the property vacant. In fact, the buyer often has less legal justification for eviction than the previous owner. In addition, the new owner cannot force the tenants to sign a new tenancy agreement.
When finding out that you wish to sell the property, the sitting tenants may hand in their notice (if the tenancy agreement allows this). This could very easily result in a void period that leaves you without rent, unable to pay your mortgage and liable for council tax. An empty property is also more vulnerable to theft, vandalism and squatters, and therefore demands higher insurance premiums.
If the property is empty for a prolonged period of time this could result in dilapidations and the extra cost of paying for maintenance and repairs. For more information on your obligations as a landlord, please visit our Landlord Hub.
If you have a sitting tenant, this limits the number of people eligible to buy your property. This is because most buyers will be using finance to fund the purchase, but most mortgage lenders require a vacant property before releasing funds.
The issues involved make buying a property with tenants a much less attractive prospect to many landlords and investors, regardless of their need for finance. This is especially true of property with sitting tenants on long-term or lifetime tenancy agreements, despite the reduced asking price that often comes with these types of homes.
There are many reasons why selling a property with tenants to Open Property Group is a great idea. First, it takes away all the time and stress of finding an agent, as well as conducting many different viewings. Second, it gives you a guaranteed cash sale, saves you the hassle of paying off your mortgage and settling the 2 per cent estate agent fees.
If you want to reduce your portfolio, relocate, or free up money for a new home or holiday, there is no quicker or easier way to do it than to sell to Open Property Group. It also saves you from having to serve notices and court fees, while also allowing you to side-step those dreaded void periods.
Here at Open Property Group, we are reputable buyers with the funds available to buy almost any property with tenants in situ. You will not have to inform your tenants of the sale, and we do not need to inspect the property before making our offer.
We commit to buying property with tenants on assured shorthold tenancies (AST), life agreements, and those with informal or verbal arrangements in place. If you have property for sale with tenants, please call Open Property Group on 0800 990 3939.