Yes, you can sell a property with a tenant still living in it. However, you will need to abide by the tenants’ rights and the tenancy you have in place. Selling with a tenant in the property may limit the number of buyers that might be interested.
Steps you need to take
Before listing your property, you must take a few key steps to ensure the process runs smoothly and legally. Start by reviewing the tenancy agreement to understand your obligations. Next, consider discussing the sale with your tenant. Open communication can help prevent misunderstandings and may even encourage the tenant to cooperate with viewings.
Once your tenant is aware of your intentions, decide whether to sell the property with the tenant in place or to wait until they leave. If the tenant remains, you will need to market the property to buy to let investors rather than owner occupiers, which may reduce your potential buyer pool. If the tenant is due to vacate soon, it may be worth waiting until the property is empty to attract a broader range of buyers.
It is also important to arrange for an estate agent and solicitor experienced in selling tenanted properties. They can guide you through the legal aspects and help you market the property effectively.
Tenant rights
When selling a property with a tenant in situ, you must respect their rights under the tenancy agreement and relevant housing laws. Tenants have the right to quiet enjoyment of the property, meaning they cannot be disturbed excessively by frequent viewings or intrusive inspections.
You must provide proper notice before scheduling viewings, typically at least 24 hours in advance. However, the tenant is not obliged to allow access, and if they refuse, you cannot force them to comply. Some landlords offer incentives to encourage cooperation, such as a temporary rent reduction or covering moving costs if the tenant agrees to leave early.
If the tenant has a fixed term contract, they have the right to remain in the property until the end of that term unless they agree to leave early. If they are on a periodic tenancy, they will still need the correct notice period before being asked to vacate.
Your current tenancy agreement
The type of tenancy agreement you have in place will determine how straightforward or complicated the sale process will be. If you have an assured tenancy agreement the tenant has the right to stay until the term ends. You cannot evict a tenant without a valid reason.
If you have a private residential tenancy there will be no end date. If you need to repossess a property there are eighteen grounds for repossession. One of which is the intention to sell. You will be able to ask the tenant to leave if you are planning to sell the property within three months of them moving out.
Sitting tenants and your ability to sell
Having a sitting tenant can affect both the speed of the sale and the final price achieved. Many buyers looking for a home to live in will not be interested in a tenanted property, limiting your pool of potential buyers. However, buy to let investors may see an existing tenant as an advantage, as it provides immediate rental income without the need to find a new tenant.
A sitting tenant can also impact the sale price. If the tenant has a strong legal right to remain or is paying below market rent, this can reduce the property’s value. Some investors may be willing to buy at a discounted price to reflect these challenges. If the property is in high demand and the tenant pays market rent, it may still attract competitive offers.
If the tenant has a regulated tenancy, where they have lifetime security and controlled rent, this can significantly lower the property’s value. Buyers may be deterred by the lack of flexibility and potential rental income restrictions.
Selling a property with a tenant in place requires careful planning and adherence to legal requirements. By understanding your tenant’s rights, reviewing the tenancy agreement, and considering your options, you can make an informed decision about whether to sell with a sitting tenant or wait until the property is vacant.
Read our landlords guide to selling a property with tenants.
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