If you have tenants in your home and want to sell, you have a few options: you can choose to end the contract as long as it’s okay to do so per the contract; evict the tenant; or you can sell the house with a sitting in tenant – also called a tenant in situ. This means that the future buyer takes on the house and the tenant.
For those who aren’t in a rush to sell you could also wait for the contract to come to a natural end, but choosing to do this could cost you more money. If the market value is high waiting weeks, months or a year and more to sell could mean that by the time you come to sell the property value has dropped. Naturally, deciding to end a tenancy before you have to can be equally as expensive as you can’t be sure when the house will sell and in the U.K. it can take an average of 4 months and you probably don’t want to be without an income as you try to sell the home.
Why selling a house with a tenant in situ can be desirable
Property buyers who are already landlords or who are interested in buy-to-let are going to like the idea of a guaranteed tenant, especially if you’ve got a good one!
There’s a lot to be desired. They don’t have to find a new tenant, they buy a home that instantly provides an income, they don’t have to worry about marketing the house and there’s no need to refurbish or furnish the home. For landlords, buying a house with a sitting tenant can make their life a lot easier.
A smart estate agent would help sell a house with a tenant in situ by marketing specifically to landlords. It can be a win-win situation for them, as a new landlord is a potential new client for them too.
Logistics of selling a house with a sitting tenant
Before you go ahead and sell, make sure you’ve spoken to your estate agent if you use one and checked over any documentation and specifically the contract you and the tenant signed. It’s good to know exactly what was agreed with the tenant before you sell the house.
Contracts and viewings
Generally, contracts have a clause that requests that the tenant allows viewings if the landlord decides to sell. There’s usually a stipulation around organising times and viewings as naturally, tenants need advanced notice – 24 – 48 hours is usually sufficient.
Your tenant’s deposit, if there is one, will need to be transferred to the new landlord. You have to organise this with the new property buyer. This is nothing to do with the tenant.
Communication with the tenant
The best thing is to communicate with your tenant early on. The more they know, the more receptive they will be to the process and a happy tenant who assists with the viewing process is incredibly beneficial!
It’s important to look after the tenant during this time, especially a good one! They are, after all, dealing with viewings for you and it’s possible they could get overwhelmed or frustrated with the process if they’re not looked after and kept updated.
You can let them know that often in this situation, nothing changes, as the contract remains the same and the only change is the new landlord.