View Full Version : Selling with tenants...
I've had a search for this question on the forum, think I've found the answer, but just want to make sure.
I am selling my property with tenants included and all should complete soon. Within the AST for the students it says the property may be sold and agreements transfered to the new buyer. The buyer is happy with my AST's which end in June 2006 (end of academic year) and is going to let the tenancy run until the end...
The question is how do I transfer the tenants to him ? Do I need to get the tenants to sign an Admendment sheet to their current agreements showing their new landlord details, signed by myself, the new owner and the tenants or do I hand over the current agreements and he handles it all.
This will only be done when the sale has completed.
Any help or finger in the right direction is much appreciated.
16-11-2005, 21:13 PM
We have sold 2 properties in the last 2 years under these same circumstances, except that our tenants were not students.
The sale is quite straight forward - just a case of a change of Landlord. No new tenancy agreements were needed. Once the property contracts were exchanged, and completion date set, the tenants were informed of the name and address of the new landlord, and told that from completion date, to deal with the new landlord.
In order that there was no confusion, each of the tenants signed a statement showing:-
1. the amount of rent currently being paid,
2. the amount of deposit held by the landlord,
3. details of any arrears, or whether any were receiving housing benefit. Where there were arrears and we were holding a deposit, we took the arrears from the deposit before passing over the net deposit to the purchaser. In all cases the deposit exceeded the amount owed. It could be tricky if the tenant was still in debt to you after the sale. In any case, copies of the ASTs should be kept for your records.
If there is no clear inventory, it could be helpful for the tenants to identify which items of furniture etc belonged to them, rather than to the landlord.
The landlord passes a copy of the signed statements to the purchaser, with the actual ASTs, on completion, apportioning the rent paid between the vendor and purchaser as necessary ie if the rent is paid in advance on 1st of the month and completion took place on 15th of the month, half of the rent already received is passed over to the purchaser.
All these financial adjustments can be made in the final account by the solicitor.
Having said it is straight forward, I have made it sound complicated, but in both of our sales, everything went through smoothly.
16-11-2005, 21:54 PM
We have sold 2 properties in the last 2 years under these same circumstances, except that our tenants were not students.Do you reckon it is a selling point having tenants in situ, or the opposite? I suppose it depends on whether the property is first and foremost an investment property (eg an obvious HMO) or one which could equally well appeal to someone wanting to move in themselves?
17-11-2005, 02:35 AM
You have kind of answered your own question Eric. Depends upon the buyer. If they are buying it as an investment, then undoubtedly it is better to have tenants in situ. If they are buying it as their own property, then it is certainly not. As still, generally speaking, most purchasers are buying property for their personal use, generally it is a bad thing. :D
Thanks for the info, yep this is similar to what I was planning on doing. All the tenants are in credit as I take rent a term in advance and the next payment is not due until the start of next year. The inventorys are very comprehenisve so they won't be a problem either.
I can only speak for student rentals, investors will buy them at any time of the year if they are full as the start having income straight off an won't have to wait for the start of the academic year. If they are empty then usually they are sold leading up to the summer so they can fill it ready for September or if any work is required. Where my place is there are builder vans in every street over the summer !
Thanks for the info, it was a great help.
18-11-2005, 23:18 PM
The situation is slightly different when the tenants are not students. All of our tenants were in the periodic phase of an AST, and as soon as we decided to sell, we issued S21 notices to each of the tenants, giving them 2 months notice to quit, but pointing out that they may not have to move, depending on who finally bought the property. That way all prospective purchasers are happy that they can either retain the tenants or obtain vacant possession without much delay.
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