Sometimes landlords will want to sell their properties with sitting tenants.
This post, which was prompted by a question I got asked along the lines of the first point below, looks at this and tries to demolish a few myths.
Here are five important points:
1. Vendors eviction rights
The fact that you want to sell your rented property does not entitle you, per se, to evict the tenants. There is no special ‘I want to sell the house so you will have to go’ ground for possession in the legislation.
You either sell with the tenants in situ or wait until you can evict them normally (ie using section 21).
2. Vendor / landlords rights to show round purchasers
Neither does that fact that you want to sell the house or flat mean that you have the right to take prospective purchasers round whenever you like. You can only do this
(a) if it is authorised by your tenancy agreement and
(b) upon giving the tenants not less than 24 hours notice in writing.
If your tenancy agreement does not mention viewings by prospective purchasers, then you are not entitled to take anyone round as of right, and you will be at the mercy of your tenants good will.
Even if your tenancy agreement does mention it, the tenants will be entitled to refuse to allow access save at times convenient to them, and if there are a lot of viewings this may constitute a breach of their covenant of quiet enjoyment.
After all, would you like a stream of strangers walking around YOUR home and poking about in your cupboards?
3. Purchasers rights as landlord
When the property is sold, the purchaser will become the landlord of the tenants, in the same way that the vendor was. The text books describe this as saying that he ‘stands in the shoes’ of the vendor.
He does not have any extra rights and some grounds for eviction will no longer be available.
4. Changing the tenancy agreements
So far as the tenancy agreements are concerned, these will still be valid even thought the landlords name is out of date.
It is a good idea, from the landlords point of view, to get new tenancy agreements signed up as soon as you can. However if the tenant has security of tenure he will often refuse to sign anything. There is nothing the landlord can do about this.
What the landlord should do though, is write a formal letter to the tenants telling them of the change of landlord and giving details for the payment of rent.
5. Purchasers eviction rights
Finally, if the vendor does not have any special rights to evict tenants because of the sale, neither does the purchaser.
In fact it is more difficult for the purchaser. Some grounds for possession will be lost to him (eg ground 6 is not available to a landlord by purchase), and he may find it difficult, if challenged, to prove the date a tenancy started or service of notices.
It is very important therefore, if the purchaser is looking to get vacant possession after purchase, that he gets proper evidence of these matters, verified by statutory declarations, from the vendor before completion.
Purchasers should also be wary of cheaply priced investment properties as these may contain nightmare tenants who cannot be evicted as they have a protected tenancy.
Note – if you need to evict your tenants you will find guidance >> here.