I’m selling my property, should I give my tenant notice or not?

I’m selling my property, should I give my tenant notice or not?

This is a tricky one, as the answer really depends on who you think your property is likely to sell to. The answer will possibly dictate your next move. 

The best way to ascertain interest would be to speak with the agent you are looking to use and try to get a view on the type of viewers that they would expect to enquire about your property. If they have a waiting list of first-time buyers crying out for properties like yours, you may find offering the property with no tenants is a better financial decision. If, however, the agent works with a local landlord looking to expand their portfolio, you (and your tenants) may have hit gold. 

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Before you go any further though, it is a really good idea to speak to your tenants. It goes without saying that you should let them know what is going on and keep them up to date with any plans – whatever you choose to do you need them on side – however you may be sitting on a potential buyer without even realising it. If your tenant is happy living in the property and is hoping to take a step on to the property ladder, this could be a marriage made in heaven! 

Selling untenanted

If you do choose to sell untenanted, you are quite right that you need to give your tenant the appropriate notice. 

In this instance, a section 21 notice is the best option – section 21 is the ‘no-fault’ option, your tenant hasn’t breached the tenancy agreement in any way, so this would be the most appropriate notice to use. Issued correctly, this will give your tenant two months’ notice. 

However, this is possibly looking to change – we are expecting to see section 21 abolished soon and replaced with a ‘beefed up’ section 8 notice. One of the grounds that is expected to be added to the new S8, is for exactly this situation, if a landlord is looking to sell. However, until those changes are in place (and we can’t put a timeline on that!) it’s a S21 all the way. 

It is worth bearing in mind though that the sale of a property can be a lengthy process. You could consider holding off issuing notice until you have a firm offer in place – there’s no point losing rent and your tenant being turfed out if there’s no rush, is there? 

Selling tenanted

Alternatively, everyone staying put can really work out well. 

If you sell to an investor, having a reliable, settled tenant in place makes the whole situation much simpler -they don’t have the hassle of finding new tenants, and your tenant can stay in their home. 

Do bear in mind though that it isn’t simple to get a mortgage on a tenanted property, so you may limit yourself to cash buyers only. This clearly limits the market and depending on the price of your property may be a deciding factor. Also, your property is still your tenant’s home, so viewings and any meetings at the property still must be done with their permission. You must give 24 hours’ notice, and they are perfectly within their rights to refuse entry, so do try to be understanding and not bombard them with constant requests to view. 

Exterior of a house

One thing to also think about is the area your property is in. Some locations have Area 4 directives in place, which put the brakes on any development to large, tenanted units within a geographical area. If you own an HMO in this area, it is well worth considering keeping tenants in situ and selling as a going concern, as any buyer would not be allowed to convert it back to an HMO if they bought it as a standard residential property. HMO’s are likely to be in demand in the area if no more can be created, so keeping yours on the open market may be a wise move (and one that you could possibly demand a top dollar price for).

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