Can You Sell a House with a Tenant in Situ?

Whether you own one or a portfolio of buy-to-let properties, there may well come a day when you want to step back from being a landlord. It’s understandable, the role of a landlord is pretty much a 24/7 job if you manage the property yourself. Especially if you own multiple. Chasing rent payments, booking maintenance teams and complying with health and safety legislation means switching off is not always easy.

For some landlords, selling up can’t come soon enough. But occasionally, things get in the way of making it a quick and easy process. Perhaps the biggest problem is having tenants still contracted to live at the property. You may want to retire within the next 6 months, but if your tenants have a 12 or 24-month contract, will you have to shelve those plans for a while?

Luckily you can still sell a house with tenants in situ, and in this blog, we’ll explain how.

What does it mean to sell a house with a tenant in situ?

Selling a house with tenants in situ means you sell the house to someone else, but your tenants remain living there. The tenancy agreement stays in place and is taken on by the new owner. For the tenant, nothing changes other than they now have a new landlord.

Why would a landlord sell a house with tenants in situ?

Reasons vary, and as we mentioned in our intro, it may stem from wanting to get out of the property business and move onto new things, scale down the portfolio or retire. For others, a change in circumstances may mean that selling up is the most beneficial option. For the most part, it’s a personal choice but not one that should be taken lightly. Selling a house with tenants in situ is possible but it may also mean you don’t get as much for your property if you sell it vacant.

Selling it vacant though means going without rental income for as long as it takes to sell, and on the current UK property market, this could be six months or more.

What are the benefits of selling a house with a tenant in situ?

Landlords can benefit from an easy sales process if they sell with a tenant in situ. Not only will they continue to earn rental income up until the sale, but they give new landlords a ready-made income generator. With tenants already in place, the new owners don’t have to spend time or money finding people to rent the property or get the property ready for rent. In addition, the drawn-out reference process is cut out completely as references can already be provided.

With no void periods, both seller and buyer stand to benefit as the income continues to roll in.

Who can buy a property with tenants in situ?

Anybody, but it would probably be best to target landlords or approach companies that offer to buy any home. Seasoned landlords will already know their legal obligations and understand everything about a property with tenants already in place.

Advertising your property to a broader audience, including those who aren’t landlords or cash house buyers puts your property in front of more people, it can be a little more complicated though and might have a few more bumps in the road.

How to sell a house with a tenant in situ

If you have decided it is time to sell, there are a few steps you should follow. These will ensure a smooth transition from one landlord to the next.

Notify your tenants

Before you do anything, you should notify your tenants of your plans to sell. This will, of course, concern them. They may wonder if they will still have a roof over their heads. Simply reassure them that nothing will change for them other than who they pay rent to. Explain that the tenancy agreement you have in place with them remains valid and will continue until its expiry.

Prepare the home for sale

Depending on how long you have owned the property, it may have fallen into a condition where it’s seen better days. This can harm its appeal to buyers. Spend a little time and money to correct any issues and get repairs and maintenance booked. This stands to benefit the tenants, yourself and any new potential landlord.

Ensure you have all the property paperwork

Any property transaction requires a wealth of paperwork and selling with a tenant in situ is no different. Collect all the paperwork relating to your ownership of the home and the tenancy. This would include:

• Proof of property ownership
• Tenancy agreement
• References
• Deposit information (including which scheme it is protected with)
• Gas safety certificate
• Electrical installation report
• EPC
• Any inventories
• If there are outstanding or in progress maintenance jobs
• Whether there is any rent outstanding

All of these will give a buyer a clear picture of the property and help them decide whether it’s a worthwhile investment.

Market the home

You’ll need to advertise the property so you can start getting viewings. How you do this will come down to how fast you want to sell and what route to sale aligns with your goals. You can try the traditional estate agent route, a notoriously slow process, but one that might put your property in front of a larger audience. You could also look for cash house buyers. These tend to be individuals or businesses that specialise in obtaining tenanted properties. They can move fast as the funds to purchase are already in place and can work around a timeline that suits you.

Regardless of how you plan to sell, you must mention that the property has tenants in situ, and it would be advisable to state how long remains on the tenancy.

Booking viewings

Your goal may be to sell your house fast, but you must remain aware of the tenants at all times. You will need to give them 24-48 hours’ notice of viewings and ensure they give their consent for them to take place.

Unplanned or inconvenient viewing could see you breaching the terms of the tenancy agreement and lead to tenants exercising their right to refuse a viewing. Consider scheduling viewings in blocks rather than spread across the week to help mitigate this.

Accepting an offer and completing the sale

Should you accept an offer and proceed with the sale, your conveyancer should draw up a contract explaining that tenants are staying in the property. The transfer of the tenancy agreement, deposit details, relevant safety certificates and property paperwork should also take place at this time. Then it’s simply a case of handing over the keys.

Can I evict a tenant in situ if I want to sell?

At the time of writing, it was still possible for a landlord to evict a tenant via a Section 21 notice, however, it is anticipated that by summer 2025, these evictions will be a thing of the past. Instead, landlords will be required to issue a Section 8 notice that states one or more valid grounds for eviction from a list of seventeen. One of which is selling the property.

For the time being, Section 21 remains, and this can be used to evict a tenant with two months’ notice after the first six months of the tenancy and once any initial fixed period has expired.

When Section 8 comes into full effect, the tenant cannot be evicted during the first year of a new tenancy and the notice period extends to four months rather than two. Perhaps worth noting is that any property where tenants have been evicted in this way cannot be let out for a further 16 months after the notice is served. This could be hugely detrimental as you could end up with an empty property for well over a year delivering zero rental income.

The solution perhaps lies with Bettermove. Our route to sale ensures you can sell a tenanted property without fear of breaching any terms. We can offer to buy the home from you or market it to our exclusive network of cash buyers. Both options provide a speedy sales solution and ensure you and your tenants remain happy. With a timeline built around your needs, the entire process can be completed in as little as seven days if needed. Contact us today to find out more.