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How to Sell Property with Sitting Tenants

By Jamie Richardson | December 11, 2020

Owning a rental property can be a great way to make additional income. However, issues can arise when it comes to selling tenanted property.

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When it comes to selling property with sitting tenants, many landlords find themselves trapped in a web of questions that only the law can answer.

  •      Is it legal to sell property with sitting tenants?
  •      If yes, should you evict the tenants or wait until the tenancy ends?
  •      And if eviction is an option, what are your eviction rights as a landlord?

First things first; it’s legal to sell property with sitting tenants. Landlords do it all the time in the UK and tenants have little to no control over this.

However, selling property with tenants in situ isn’t as simple as it sounds, and a simple mistake can have serious legal consequences. In this article, you’ll learn how to sell a property with a sitting tenant the right way. But first, a quick crash course on sitting tenants.

What Is a Sitting Tenant?

Also called a tenant in situ, a sitting tenant is someone who has rented property that the owner (seller) intends to sell.

If the occupant has a contract or a tenancy agreement with the current property owner, then they have the legal rights to continue living in the property even after the ownership changes hands, unless stated otherwise.  

While it’s legal to sell a house with a tenant in situ, evicting a tenant without proper notice or following the required legal procedure can put you in trouble.

How to Sell a House with a Sitting Tenant

When it comes to selling a house with a tenant in situ, you have many options. We’ll mention just a few in this post.

1. Give the Tenant a Notice

You can give the sitting tenants notice, where possible. 

Note that you can only give your tenants a notice of eviction if the tenancy agreement allows it. For example, if the tenancy is an assured shorthand tenancy, you can issue what is called a Section 21 Notice to all your tenants.

But if your tenancy is regulated on an assured tenancy, you will not be able to issue an eviction notice. In such cases, you could give the tenants an incentive and ask them to leave voluntarily or try the next solution.

2. Sell the House with Sitting Tenants to a Cash Buyer

Selling your house to a property buying company, complete with a sitting tenant, can be a quick and straightforward solution to your ‘tenants in situ’ problems.

Many property buying companies that specialize in quick property sales exist and are always ready to buy your house, even with existing tenants for cash.

Plus they eliminate the middleman and the lengthy mortgage processes, allowing the process to finalize in days while solving all your tenancy problems. When you sell your house with sitting tenants to a buying company, the tenancy becomes the responsibility of the buyer.

3. Wait Until the Tenancy Ends

Selling a property with tenants in situ can present a lot of problems to the seller.

First, the presence of sitting tenants can reduce the value of the property by up to 40%. Secondly, most lending institutions will not give a mortgage on a property with a sitting tenant. This often makes it unattractive to buyers and hard to sell.

But you can avoid all these problems by opting to wait for the tenancy to end, then sell the house with vacant possession. This can help you avoid eviction hurdles and other problems that come with selling a house with tenants.

Jamie is a 5-year freelance writer who enjoys real estate. He is currently a Realty Biz News Contributor.
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