5 Weird mistakes when selling a property with sitting tenants
Published by Property Saviour
The UK's No.1 Fast House Sale Company
February 27, 2016 - Read time: 3 minutes
During sometime in their ownership, many landlords would want to sell their buy to let properties because of a change in their circumstances. This can lead to costly 5 mistakes when selling a property with sitting tenants. This blog post looks at common myths of landlords that may be cost a lot of money:
1. Sellers’ right of eviction
Because you want to sell your rented property would not allow you, per se, to kick-out the tenants. There’s no special ‘I want to sell the place so you will have to leave’ ground for possession within the legislation.You can either sell with the tenants in situ or delay until you can evict them normally i.e. using section 21.The most common scenario being the landlord serves Section 21 planning to sell and expects the tenant to depart.
The tenant will make a homeless application and gets told, that they are not homeless under the statutory definition because until they leave or property owner obtains an order for possession they will have a legal or equitable interest in the house. Many of them don’t have the deposit and rent in advance to find somewhere else and the landlord will get the hump. This is how the harassment and illegal evictions come in as the landlord panics and attempts to circumvent this process, blaming the local council for screwing up their options.
Landlords may become angry that the council takes such a hard line although the council is just doing exactly what the law requires it to do and the council isn’t there to handle landlord’s problem for them.
2. Landlord’s rights to show round potential buyers
Neither does this fact that you want to sell the house or flat suggest that you have the right to take prospective potential buyers round whenever you like. You are able to only do this:
(a) If it is authorised because of tenancy agreement and
(b) On giving the tenants 24 hours’ notice in writing. If the tenancy agreement doesn’t mention viewings by prospective purchasers, then you’re not entitled to take anyone round as of right and you’ll be at the mercy of your tenants’ goodwill.
Even when your tenancy agreement does bring it up, the tenants will likely be entitled to refuse to allow access save at times convenient to them, of course, if there is a lots of viewings this can constitute a breach of the covenant of quiet enjoyment.
In fact, would you like a stream of strangers wandering your house and poking about in the cupboards?
And it’s not only the tenants who are impacted by these situations. We now have have 2 cases when the landlord did not follow the process but sold anyway, and when the buyers arrived to move in they found sitting tenants already in possession. The buyers are now living on friend’s settees since vendor didn’t do what the law required them to do first. The buyers are now looking to sue the owner. Everybody gets affected because of this, the tenants, the new buyers and original sellers.
For inspections for disrepair you have to give at least 1 day’s written notice per s11 of the Landlord & Tenant Act 1985.
Inspections for buyers when the landlord is selling the house are not of course included in this. However I think it likely that any clause allowing the landlord to inspect for this WITHOUT at the least 24 hours written notice could possibly be considered unfair, and thus unenforceable, under the Unfair Terms in Consumer Contracts Regulations 1999.Remember the covenant of quiet enjoyment that is definitely implied into all tenancies.
3. Buyers rights as the new landlord
When the house is sold, the new buyer becomes the landlord of the tenants, just like that the seller was. The text books describe this as saying that he ‘stands in the shoes’ of the seller.
He doesn’t possess extra rights and certain grounds for eviction will not be available.
4. Issue a new tenancy agreement
As far as the tenancy agreements go, these shall be valid whether or not the landlords name is out of date. It is a good idea, from the landlords perspective, to have new tenancy agreements drawn up as soon as you can. However if the tenant has security of tenure he will often refuse to sign anything. There’s nothing at all the landlord can do about it.
The landlord must do is write a formal letter to the tenants letting them know of the change of landlord and providing details for the payment of rent.
5. Buyers eviction rights
Finally, if the vendor doesn’t have any special rights to evict tenants as a result of sale, neither does the purchaser.
In actual fact it is more difficult for the buyer. Some grounds for possession will be lost to him for instance ground 6 is not available to a landlord by purchase, and he could find it difficult, if challenged, to demonstrate the date a tenancy started or service of notices.
It is crucial therefore, if the buyer is looking to get vacant possession after purchase, that he gets proper evidence of these matters, verified by statutory declarations, with the seller before completion.
Purchasers should also be cautious about distressed investment properties as these could have nightmare tenants who cannot be evicted as they have a protected tenancy.
If you need to easily sell a house with sitting tenants but you are finding this process difficult get in touch with us.
Can a landlord “take” property off their tenant without having a court order?
Supposing that we’re talking a standard residential Assured Shorthold Tenancy here if we’re talking a commercial or very high value residentia let, different rules apply, but for a normal house or flat with a human tenant rather than a company tenant:
For the tenancy agreement signed since 6th April 2007, when the deposit provisions of the 2004 Housing Act got into force, landlords aren’t able to take deposits in anything other than cash, and that cash must be deposited with an approved Tenancy Deposit Scheme such as TPS.
If a tenant vacates a property and leaves their possessions, the owner may be, under some circumstances, allowed to dispose of them.
But a landlord just walking into a house and taking a tenant’s stuff is theft, additionally, the tenant should call the police.
Before you begin worrying about legal rights, though, it may be worth talking to your landlord. I doubt very much they are trying to evict you without giving you a reason. They must have some reason, or why do they really bother? If you’re able to find out what that reason is, then that can help you work out what to do. If they are evicting you because they want to live in the house themselves, for instance, then you should probably start packing. When they want to sell the property, then perhaps the next owner is planning to let it out and would like you to stay there so they do not have to look for a new tenant.
It’s worth speaking to your landlord, there’s no point in communicating through documents and forms or legal procedures. Just ask if you can talk about it. I know it can be tough to talk about such serious things, especially when you’re not really ‘friends’ in a way but have a business type of relationship, but just try to be calm and friendly to talk about it in a constructive way.