If you are looking to sell your rental property, you have the option of selling with vacant possession or with the tenants in situ.
Selling with Vacant Possession
Selling by vacant possession means that the tenants will have vacated the property before completion. If you go down this route you will need to serve notice on the tenants, telling them to vacate. The benefit of this is that the property may be easier to market, as the property will be empty. You would also have a wider market, as you would not just be narrowing yourself to investment buyers. And you may be able to negotiate a higher asking price because of this. The downside of this is that it may take a little time for the property to sell. You will have to cover bills and mortgage payments during this period. There is also the risk that the tenants may refuse to vacate the property. Which could result in eviction proceedings and cause delays in any potential sale.
Selling with Tenants-in-Situ
If you sell with tenants-in-situ, this means that the tenants continue to live in the property. You sell the property to the buyer and transfer the tenancy agreement and deposit at the same time. This can be useful to any new investment Buyer, as they have immediate rental income as soon as they have purchased the property. You would, however, need to inform the tenant of your intention and arrange viewings with them, as per the terms of their tenancy agreement. This would require a degree of sensitivity, in keeping the tenants on side and assuring them that their tenancy will remain valid on the sale. The new Buyer will also want to make sure that the tenants are ‘good tenants’ and will want to check references and undertake credit checks to make sure they will have no problems once they become the Landlord.
When you sell a rental property with tenants-in-situ the purchaser is likely to need the below information:
-Energy Performance Certificate
-Electrical safety checks
-Whether a deposit was paid and if so the deposit protection information
-Gas safety certificates
-A copy of all tenancy agreements
-Whether any notices have been served from the Council
-Whether you took any fees from the tenant
In terms of conveyancing, additional provisions would need to be inserted into the sale contract and our conveyancing experts would be able to assist with this when undertaking the conveyancing for you.
Tenant wishing to purchase the property from you
Recent stamp duty changes, especially for first time buyers, may also mean that your tenant may contact you to see if you would be willing to sell the property to them. If you are looking to sell, this may be a very convenient way of selling, as you may be able to avoid estate agents’ fees and reduce the transaction time, as you will not have to market the property.
If you are thinking of selling your investment property and require advice to check your tenancy agreement and then assistance with the conveyancing, please do not hesitate to contact us.