Landlords sometimes face a dilemma when they want to sell a rental property, or even a portfolio of their rental properties. Sometimes landlords have no choice but to sell as they are being forced to sell for financial reasons.
Residential properties, unlike their commercial counterparts, always sell best when they are vacant – the term is a sale “with vacant possession”.
If the property is rented out, that’s not so easy.
You can’t just end a tenancy midway through a contracted term because the tenant has a right to stay to the end of the term, and in any case is entitled to “quiet enjoyment” which means you cannot force sale viewings on the tenant if your tenant refuses them.
Even if you decide to sell at the end of the term your tenant may not be willing to leave voluntarily, so you have no option but to go through the eviction process using the Section 21 procedure.
The problem with that is, even if you serve your section 21 notice a good 2 months before the term ends, it can still take two or three months (sometimes even longer) to finally get possession with a court order and possibly a bailiff eviction.
If your tenant leaves voluntarily at the end of the term, then fine, you have vacant possession and you can start to market your property. The downside of that is, all the time you are marketing the property, and you have no idea how long it will take to sell, there’s no rent coming in.
If you are already suffering financially, and you have a mortgage to pay, then the situation can be untenable and you may lose your investment if the mortgage company decides to re-possess.
If you wanted your tenant to leave early, mid tenancy term, there’s no legal way you can achieve that without your tenant’s agreement. You tenant may be willing to move out, if you are very lucky, or you may be able to persuade the tenant to leave with a cash inducement, but there are no guarantees.
Obviously it’s not fair to ask a tenant to up and leave when they expected to remain, at least a full tenancy term. This is just the same for the landlord if the situation were reversed, when a tenant asks to leave early.
Most reasonable tenants will leave at the end of the tenancy term if they are asked to do so. Most realise they would need to leave at some point in any case, so most will oblige especially if they are aware that their landlord is having difficulties.
But it’s not fair to put your tenant under any sort of pressure and if you try to be too persuasive you could be accused of harassment, a criminal offence under the Protection from Eviction Act 1977.
Another alternative for landlords is to consider a sale to another landlord with the property already tenanted. If the price is right, investor landlords often buy properties that are already tenanted, and these often appear in auction sales when landlords are forced to sell quickly.
Sometimes, whole portfolios of a landlord’s investment properties come onto the market and “under the hammer” when a landlord wishes to retire or this is part of a disposal of a whole landlord’s estate.
However, another alternative, and one that can often bring a better price than auction sales, is to market the tenanted property through a national landlord to landlord advertising medium. One method is to use an agency with the facilities and expertise to market and to e-mail broadcast to a large data base of landlord investors.
One such property marketing service is LandlordDEALS.co.uk, a landlord to landlord rental property exchange. Marketing the property or properties in this way, through a company able to target many thousands of landlords through a mail broadcast, is a quick and efficient way to contact interested buyers.
This service is available to private landlords and property agents through this LandlordZONE® affiliated service.
By Tom Entwistle,
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©LandlordZONE All Rights Reserved – never rely totally on these general guidelines which apply primarily to England and Wales. They are not definitive statements of the law. Before taking action or not, always do your own research and/or seek professional advice with the full facts of your case and all documents to hand.