Can you sell your property while tenants live there?

December, 2019

A guide to what happens when you want to sell a property that has tenants living in it.

If you own a property that you rent out and you decide to sell it, you may be concerned about your tenants and what you can or cannot do legally. This is a very common question, so here is a quick guide as to what your rights are when selling a property if tenants are still living there.
Selling to Another Landlord
If you want to sell a property but have a fixed tenancy agreement with tenants who do not want to leave, you could sell your property to another landlord. This is actually a good deal for someone looking to buy-to-let as it means they begin their new property ownership with an income. The sale is processed in the usual way, but all the documents surrounding the tenancy will form part of a process and will need to be handed over to your solicitors. For your tenants, this is a relief as there is nothing for them to do, except agree a mutual time for the new landlord to come and view the property to make sure they are happy to buy. As the seller, you also have no loss of income, you will be paid the rent to the date of completion, and the rest of that month will be passed onto the new owner.
Selling on the Open Market
If you want to sell your property to someone who wants to move in, then you do have a slightly more complicated case. You have every right to sell to anyone, but you have to look after your tenants. On a shorthold tenancy, you can give notice at any time, and you can decide whether to do this as soon as you choose to market or leave it until you have a buyer, but the notice is a 60-day section 21 notice, and you cannot have them removed any quicker. Some people think it is easier to move the tenants first and sell as an empty property, but it is your choice. But, if you choose to market the property whilst the tenants are situated in the house, you need to establish whether you have a clause that allows for viewings if the house is put on the market. With this clause, you have the right to show prospective buyers around but must give 24 hours’ notice in writing. If you do not have this clause, you have to obtain express permission in writing, and there is a possibility they will refuse you. With a fixed tenancy agreement the tenants can stay until the tenancy expires and you do not have to renew, but again you should give them plenty of notice that you will not be renewing their contract, so they have time to make alternative arrangements, that is common courtesy. Finally, you must comply with the government-led tenancy deposit scheme regardless of whether you plan to sell or not as this will ensure their deposit is correctly returned when you sell.

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