How to Buy & Sell Property with a Sitting Tenant

News & Updates
1

Originally published at: How to Buy & Sell Property with a Sitting Tenant | OpenRent Landlord Hub

Landlords often evict their tenants before putting the house on the market. They assume this is the fastest route to a successful sale because it is what potential buyers want.  But landlords should seriously consider the alternative: selling the property with the tenant in situ. A good sitting tenant can be a significant asset for…

3

I’m in the process of purchasing a property with a tenant in situ. The current agreement is for a fully furnished let but I want to change it to unfurnished. The seller is coming to an agreement about the furnishings directly with the tenant. The current tenancy is periodic.
I would like to offer the tenant a new 1 year AST. What is the best way of going about this please?

5

You should be aware that there is no compulsion on the part of the tenant to sign a new AST and they could insist that you continue to honour the terms of the agreement you will inherit.

If they do agree, just prepare all new paperwork (AST and all other prescribed documents) and all parties sign them. The new tenancy, (as long as its with the same named people as the existing tenancy) will just replace the old one.

6

I am in the process of selling my flat which is currently empty
Because the process may take a few months, I am thinking of bringing in new tenants, as the monthly costs are not trivial.
The buyer is OK with this, assuming we agree on the tenants, rent, etc…
But how do I approach this with perspective tenants? Should this be part of their contract? Will everything transfer to the buyer as was described in the post?
Any advice would help
Many thanks
Soli

7

I wouldnt if I were you. Quickest way to lose a sale as it can take over a year to evict a reluctant tenant.

2 Likes
8

do you mean the buyer wants a tenant in when they have bought it ?

9

so… quick chain of events
Had tenants for some time
Started a sale
Tenants decided to move out
Sale is now ongoing
Want to get new tenants in before sale completes as am losing money while everything is worked out
The buyer is a BTL to hopefully he wont object
Then need to convince new tenants its ok to move in even during a sale

10

Except you won’t be able to evict them if they have nowhere else to go unless you are also living there.

11

You shall need to inform the new tenants
New buyer will need to protect deposit in his name and serve a section 3 and 48 ( ideally start a new AST)
Ideally the new buyer would start a new AST and serve all documents again ( just to cover himself)

12

I know solicitors etc can drag their feet but if your property is vacant and the buyer is BTL how long are you anticipating it all to go on for?

Could you agree a nearer deadline with your solicitor and the buyer?

Obviously we don’t know all the details, but must be a stressful situation trying to sell and find new tenants.

13

thanks everybody
yes very stressful
and of course no idea how long the process will take. even if it is 3 months, central London, just mortgage interest, council tax, bills, it not ideal…
And any new tenant will want assurance, which means lawyers drafting something into the contract, which means more costs, maybe offsetting the benefits of having new tenants lol