Renting out a home can be a great way of earning an extra income. But what happens when your circumstances change? What happens if you need to raise money quickly? What if you need to relocate in a hurry? Can you sell a house you’re renting out?
The short answer is “yes”, but there are a few issues you might want to consider.
What happens if the tenants are still living there?
You can sell your house while you have sitting tenants with a fixed-term lease which is your right. By the letter of the law, you don’t have to give your tenants a role in the process. As long as you find someone willing to meet your asking price, there are no legal obstacles in your way.
But this doesn’t mean the tenant doesn’t have any rights. Not only that, you’re duty-bound to inform any potential buyers about your tenants — and the details of their lease.
When a tenant signs a fixed-term lease, the agreement pertains to the property. And it doesn’t matter who owns that property or how many times it changes hands during the lease term meaning that the person to whom you sell your home takes on responsibility for the tenants.
The new owner doesn’t have the power to evict the tenants before the end of the lease. So the contract that you initiated with the tenants is still fully enforceable after the property changes hands.
How do I sell a house with sitting tenants?
The selling process is essentially the same. However, you should state that the property has sitting tenants in the initial listing. It’s worth bearing in mind that most potential buyers will probably prefer to take possession of the vacant property — unless you specifically target buy-to-let owners.
Taking on the responsibility of an existing lease contract involves a degree of work and administration. As a result, you may have to accept a slightly lower-than-average offer for the property.
If you have problem tenants, the process of selling a house becomes far more complex. To avoid legal action later down the line, you should be honest about the issues you’ve faced. Whether your tenants are behind in their rent or they’re guilty of anti-social behaviour, be upfront about the problems from the outset.
Again, problem tenants can significantly reduce the market value of a property. But solving the issue yourself involves stress, hard work, worry, and a lot of money more often than not. If you’d instead leave the problem to someone else and cut your losses, Flying Homes can help. We buy houses directly from buyers, so you don’t have to worry about marketing or the various legal issues you might be facing.
Selling on the open market.
If you’re determined to sell your home on the open market, you need to have a good relationship with your tenants. That’s because the Landlord and Tenant Act 1985 enshrines a tenant’s right to privacy in law.
You have no automatic right to gain access to the property. And if the tenant refuses to cooperate, you could find it almost impossible to schedule property viewings with prospective buyers.