Your FAQ’s answered about selling a rental property occupied by tenants

We recently sat down with one of our agents Fiona, and asked her the most frequent questions Landlords have when coming to sell their occupied property. Below are her very informative responses, if you have further questions do feel free to contact us in the office.

• Can I sell a property with Tenants in situ?

Yes, in principle you can but the tenants rights remain intact in terms of issuing notice. So this needs to be flagged up if relevant with respective buyers. This is particularly relevant under current covid restrictions as tenants are entitled to six months notice. So you will need to know if a prospective buyer is willing and able to wait that long?

Tenants however only have to give a month's notice and some tenants elect to control their destiny and move anyway if a property is marketed. As a vendor you need to understand this risk and factor it into your finances. Something to consider: Can you afford a void period of potentially a few months without rent as a sale progresses to completion?

• How would you advise the landlord approach the tenant when putting the property on the market?

It is always best to keep your tenants onside when marketing a property with them in situ. Let them know when you will be marketing the property, reassure them that they will be respected and given maximum notice for viewings etc and always give them first refusal - many tenants end up buying the property which is the best outcome for all parties.

• How do you make the property look its best with tenants living there?

Give them plenty of notice that the photos are being taken and politely ask them to tidy up and make the property presentable i.e de-clutter, clear kitchen surfaces, make beds, put washing away etc. A good agent will judge if the tenant’s lifestyle is ultimately going to be detrimental to finding a buyer. Sometimes it is better to give the tenants notice and market empty, the loss of rent being outweighed by achieving a higher sales price.

• How do viewings take place with tenants in situ? Do you have to warn them in advance and get permission?

Absolutely - it is their home at the end of the day and they have rights. A minimum of 24 hours notice for viewings and some common sense employed by the agent i.e try and arrange block viewings if possible to minimise intrusion. Also try to avoid viewings being too early or too late in the day, particularly at weekends. With many more people working from home it is worth engaging positively with the tenants and asking them if there are times that are more favourable for them.

• Will the agent contact the tenant or does the landlord have to be the go between?

It is easier for the agent to communicate directly with a tenant. It may also depend on whether the property is managed through an agent. If this is the case you may need to go through them for access. Direct communication with the tenant has the added advantage of building trust with the selling agent and speeds up communications. An agent should always update the landlord with feedback on viewings so that they are kept up to date with developments.

• Once an offer is accepted do you need to tell your tenant?

It is a courtesy to tell a tenant that a property has gone under offer but only on the authority of the landlord. They may well be checking portals and this is not a good way for the tenant to find out a sale has been agreed. The tenant is not entitled to know the details of the sale and an agent should never reveal the agreed price or any other information. It is important to retain the appropriate boundaries of tenant/landlord and vendor/buyer as they are two separate contracts and relationships.

• Do you need to send new contracts for the tenant to sign?

No - but good to acknowledge that the terms of their existing contract remain intact.

• Are there any top tips you have for all parties involved?

Communication, respect and courtesy are key. Remember that the tenants do not have a vested interest in the sale so their cooperation is vital. Understand that a landlord and a vendor have different obligations and responsibilities. A good agent will retain control of the transaction and liaise with all parties. An agent should never assume that tenants or indeed landlords fully understand the process so always ensure that there is a paper trail of communications regarding both the sale and any communications with the tenants. By keeping everyone updated with what they need to know helps avoid misunderstandings further down the line.