Selling A House With Sitting Tenants

If you’re a landlord looking to sell your buy-to-let property, but your tenants don’t plan on moving out then are you aware that you don’t have to wait for them to leave to put it on the market? You can sell the property with the tenants in situ. However, it can come with its challenges.

We’ll look at your options for selling your property with sitting tenants as a landlord in this article, as well as educate you on the tenant’s rights and advising how you can make the process as smooth and simple as possible.

In this guide:

What is a sitting tenant?

A ‘sitting tenant’ or ‘tenant in situ’ is a renter living in a property, in this case, that the landlord intends to sell. If the tenant has an ongoing agreement with the landlord, they retain the right to continue living in the rental property when it is sold. It’s incredibly important for a landlord to know their rights and their tenant’s rights to make sure everything runs smoothly and abides by all relevant legislation.

Your tenant’s rights

If your tenant is protected by the Tenancy Agreement at the time of selling, then you should wait until after their contract is up to evict them and sell the property once it is vacant. If you’d rather sell your rented property without tenants and don’t wish to wait, then you can evict a tenant by serving a valid Section 21 Notice under the Housing Act 1988 but only once a tenancy term has ended, or if an appropriate break clause is used to end the tenancy early.

You can only conduct viewings of the property if this has already been authorised in the tenancy agreement, and even then, 24 hours notice must be provided before you can enter the property. It’s some protection for the tenant in their place of residence. Tenants also have the right to refuse to show people around the property if the timing of the viewing is inconvenient for them.

Important: As a landlord, you must give a minimum of two months’ notice to your tenants before eviction. Any less than this, you are in breach of legislation and your tenants have the right to refuse.

How do I sell my tenanted property?

Selling a property with sitting tenants is very common, with most landlords choosing to go down this avenue. The two main ways you can do this are: ‘subject to the tenancy’ or ‘with vacant possession on completion’.

1. 1. Sell ‘subject to the tenancy’

Selling a rented property subject to the tenancy works the same as a regular vacant property sale, except that the Tenancy Agreement needs to be transferred to the buyer’s solicitor before completion. The buyer then becomes the new landlord to your tenants and this operation can continue to run smoothly for the tenants with no need to depart the property, and no need for the current landlord to serve any eviction notices.

1. 1. Sell with ‘vacant possession’ on completion

When selling a property with vacant possession, you must ensure that you and/or your tenants vacate the property on the day of completion as specified in the contract and that they remove all of their belongings from the property.

However you choose to sell your property is up to you. If you would like a quick sale and for the sales process to operate efficiently, then why not explore your options with a cash property buyer? At Good Move, we provide a cash offer within 24 hours of your enquiry and aim to purchase your property within 14 days, allowing you and your tenants to live as stress-free as possible.

Cash buyers are the ideal solution for landlords with sitting tenants. They encourage a fast sale, meaning minimal disruption to the tenants, and it means a happy landlord too.

Advantages of selling a property with sitting tenants

If you’re looking to sell your tenanted property on the open market, be sure to highlight these advantages to attract buyers.

• Instant rental income: Some landlords look to buy properties with sitting tenants due to the fact they have an instant reliable income because they won’t have to source new tenants and have immediate access to the rental income. Be sure to stress this to those enquiring; that they can reap the financial rewards.
• Reliable, vetted tenants: The next landlord has the reassurance that the tenants already know how to look after the property and abide by the rental agreement. It also saves the landlord from having to investigate the tenants’ payment history, occupation, references and transferring the deposit protection scheme – causing less stress and hassle.
• Less chance of financial loss: Rental properties can take several months to sell, typically due to the condition of the property, which could result in a loss of income if the property is empty for this time. By selling a property with sitting tenants, the current landlord is guaranteed equity until the sale is completed.

Disadvantages of selling a property with sitting tenants

There are certainly fewer disadvantages, but it’s always worth looking at both sides of the argument to make a well-rounded decision before selling your property.

• Restricting appeal: Selling your property with sitting tenants means that you’re only going to attract other landlords to buy your home rather than opening the property search to the likes of first-time buyers, relocators and the downsizing market.
• Lower property value: It’s thought that selling a home with sitting tenants is likely to reduce the valuation of your property, sometimes up to 25%. The main reason why is the risk associated with the transaction, plus it can be harder to find an appropriate lender in these instances.
• Dislike of change: There’s no guarantee that the new landlord and current tenants will get along, and this may prompt the tenants to look elsewhere or move out especially if their contract is close to an end. Be sure to speak to the tenants at length, explaining the process and potentially entering a new contract if possible, for added security.
• Time: The sale could take a while, especially if the rental market is slow or has taken a particular hit recently. The rental market does tend to fluctuate in the UK so pay close attention to what is happening before you choose to sell. The longer the property is on the market, the more chance there is that the tenants may look to move themselves, causing further problems.

Important: Throughout the process of selling a property with sitting tenants, you must be considerate when arranging viewings. This means giving your tenants the notice which is outlined in their rental agreement. However, your tenants do have the right to refuse if the time is inconvenient, so it’s important to be respectful and reasonable with viewing times.

Selling a property with a sitting tenant can be challenging, but if you have a good relationship with your renters and other landlords are searching for inhabited properties on the market then it will work in your favour.

If you’re wondering how long a house sale takes, the answer is fairly quickly, especially if you choose to sell your home to a reputable cash buying company like Good Move. Looking for a quick sale of your rented property? Contact our experienced team at Good Move today for your free cash offer.