If you are a landlord who lets out property in Wales you may have considered what the best course of action will be when you need to sell up.
The buy-to-let market has shrunk somewhat in recent years due to an increase in government legislation making it harder for some landlords to turn a profit. However, there are all sorts of reasons why you may be looking at selling up. While it is certainly possible to sell with sitting tenants, it can make the process harder than if your property was totally empty. It is vitally important that you work within the rules in order to ensure that you don't fall foul of laws in place to protect tenants.
While selling with sitting tenants can occasionally be difficult, it can make financial sense as it removes the need for tenants to vacate the property prior to you selling, thus, means that you still have rent coming in until the keys are exchanged.
Things to bear in mind when you have sitting tenants
Check your contract has you covered - The tenancy agreement you have in place should stipulate that your tenants must allow for viewings to be carried out. You also must give 24 - 48 hours notice before viewings are scheduled to take place.
Ask if your tenant is interested in buying the property - A simple way of solving the problem of a sitting tenant would be to offer your tenant the opportunity to purchase the property themselves. While this is not always achievable, you may find that your tenants are keen to make an offer, especially if they have been living in the property for years and are happy there.
Be sensitive to the needs of your tenants - Remembering to treat your tenants with respect and consideration is the best way to make the process of selling as smooth as possible. Therefore, be sensitive when scheduling viewings. Arranging group viewings is a good way to reduce the number of different viewings being made and is a good way to create a sense of competition amongst potential buyers. Try and avoid viewings that are early or late in the day whenever possible.
Highlight the existence of sitting tenants to potential buyers - Depending on the market in your area, the existence of sitting tenants may be seen desirable to potential landlords as it indicates the existence of a healthy rental market. Therefore, sitting tenants may actually be seen as a selling point depending on the buyer. This is a good tactic as professional landlords are more likely to pay cash then the average buyer who would be required to go through the potentially tricky process of obtaining a mortgage for a property with sitting tenants.
Consider selling to a property-buying firm - To cut down on the number of viewings you could consider selling directly to a property-buying firm who specialise in fast, reliable sales throughout the UK, such as LDN Properties
. Selling directly to a property-buying firm is a good option for landlords wanting to simplify the process of selling while tenants are still in situ.
Manage the logistics - If the tenant is still living in the property and the property is purchased by a new owner there should be no real change for them, as the contract of sale will most likely state that the property is to be sold with sitting tenants and will include their names, rent paid and the terms of the tenancy.
In terms of transferring the deposit, this should be a fairly simple matter, however, the exact protocol will depend on which scheme is being used to look after the tenant's deposit. It makes sense to work with a conveyancing solicitor who has some experience of property transactions with tenants in situ as this can help to make the whole process somewhat smoother.
Potential pitfalls - Selling with a sitting tenant can be unpredictable and there are several things that could potentially go wrong during the process. Your tenant could refuse to leave the property despite a Section 21 notice
being issued. This could result in sales falling through and even legal proceedings. If you find yourself in this difficult position it's important that you know your rights and stay on the right side of the law at all times.
You must remember that once a Section 21 notice has been served under a fixed term AST or a periodic AST, possession proceedings must begin within six months of the date the notice was given. Failure to do so will result in the possession notice becoming invalid and a new one being required.
Thank you for reading our guide on selling with sitting tenants. While this can pose challenging, it is certainly possible to sell a property with tenants in place. We hope our guide will make the process as smooth as possible for you.