Sell a house with a tenant
When it comes time to sell your house, you may find that you have tenants in situ. This can present a unique set of challenges, but it is not impossible to sell house with a tenant. Sold property always comes with a certain amount of stipulations and conditions.
Today, we’re going to discuss the pros and cons of selling a property that already has a sitting tenant. Many people believe that it’s easier to sell a property that comes with someone already living in it. However, there are certain disadvantages that come along with this type of sale as well.
Sitting tenant: Who is that?
We deal with sitting tenants or sometimes referred to as tenants in situ when the tenant-occupied property is put on the market for sale. To sell the property, the owner must follow strict rules and regulations set by the government. The tenant has certain rights that protect them from being forced to leave their home before the end of their signed tenancy agreement.
The term ‘sitting tenant’ is a bit of a misnomer as there is no legal definition for it. It is not even a phrase that you will find in the tenancy agreement. It is more of a description used to identify a tenant who occupies a property that is up for sale.
What are the types of tenancy agreements?
In England, there are six types of tenancy agreements, the most common are AST(Assured Shorthold Tenancy Agreement ), you may come across a regulated tenancy or a lodger tenancy agreement as well, depending on the situation of the tenants.
An assured shorthold tenancy gives the tenant the legal right to live in your property for a fixed term – usually six or twelve months. When the fixed term expires the tenancy can be renewed at the end of this period if both parties agree.
A regulated tenancy is slightly different from an AST in that it often applies to tenants who have been living in their property for a long time. Your rights as a tenant depend on when your agreement was signed.
If you’re renting from private landlords who haven’t been around since before 1989, then chances are good that these agreements were made under the Rent Act and thus provide some strong protections for tenants like yourself!
Regulated tenants pay a so-called fair rent which usually is below market value. The landlord also cannot evict a tenant who signed a regulated tenancy agreement unless there is a legal reason to do so.
A lodger tenancy agreement is different again as the lodger will be living in your property with you. This means that they don’t have exclusive use of any part of the property and are usually only allowed to use certain areas, like the kitchen or bathroom, at certain times.
What are the tenant’s rights when the landlord sells the property?
The tenants in situ have the right to live in the property for the duration of their tenancy agreement and should not be disturbed by viewings or open days.
If the sitting tenants are on an AST, the landlord must give them at least two months’ notice that they intend to sell the property.
The landlord must also protect the tenant’s deposit in a government-approved scheme and give them the prescribed information about the deposit within 28 days of receiving it. If the landlord doesn’t do this, they may be liable to pay the tenant up to three times the deposit.