Your Rights and Responsibilities When Selling Tenanted Property

by Laura C. Jones

As a property owner in the United Kingdom, there may come a time when you decide to sell your property even while it is tenanted. Such transactions often come with specific rights and responsibilities to uphold the well-being of all parties involved.

This guide will take you through the key considerations to remember when selling a tenanted property in the UK. With this information, you will be better equipped to navigate this process, whether you choose to go through an estate agent, a property selling service like We Buy Any Home, or sell privately.

Your Rights as the Landlord

Right to Sell the Property

Firstly, as the landlord, you have the legal right to sell your property at any time. This right is valid regardless of the fact that your property may have tenants residing in it. However, the tenancy agreement still holds, and the new owner will need to respect the terms until it naturally ends.

Right to Market the Property

You have the right to market the property and conduct viewings. However, you must give tenants at least 24 hours’ notice, and the viewing should be at a reasonable time. This notice period is in accordance with the Protection from Eviction Act 1977.

Your Responsibilities to Your Tenant

Honoring the Tenancy Agreement

It is crucial to understand that a sale doesn’t terminate the existing tenancy agreements. The new owner must honor these until their natural expiration. Tenants have the right to stay until the end of their tenancy unless there’s a break clause. Selling your property doesn’t give you the right to evict your tenants prematurely.

Keeping the Tenants Informed

While you aren’t legally obliged to inform your tenants that you plan to sell, it is usually best to be open about your intentions. Surprising your tenants with the news might lead to conflict and potentially jeopardize a smooth sale process.

Navigating the Sale

Selling with Sitting Tenants

Selling a property with sitting tenants can potentially attract investors, as it guarantees an immediate income stream. It can be a selling point for buyers who don’t want to go through the process of finding new tenants. The existing tenants might also be interested in purchasing the property themselves.

Issuing a Section 21 Notice

If the tenancy agreement contains a break clause, or if it is close to the end, you might want to sell the property vacant. In this case, you can issue a Section 21 notice, giving the tenant at least two months’ notice to leave. Be mindful of the legal requirements to serve a Section 21 notice correctly, or it can be deemed invalid.

Handling Tenancy Deposit

The deposit must be handled correctly during the sale. If it’s protected in a government-approved tenancy deposit scheme, you’ll need to transfer it to the new landlord or return it to the tenant if the tenancy ends.

In Conclusion

Selling a tenanted property can be a complex process, but by understanding your rights and responsibilities, you can ensure a smooth transition for everyone involved. Open communication and respect for tenants’ rights can lead to mutually beneficial outcomes.

Whether you’re an experienced property owner or a first-time landlord, this guide is a good starting point to navigate the complexities of selling a tenanted property. Just remember to consider all aspects and, if necessary, seek professional advice to make informed decisions.

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