Things to consider when selling a property whilst tenants are living in it.
Selling a property whilst tenants are living in it sounds straightforward but if it is not handled correctly by your agent it can quickly become a disaster which causes you stress.
Respect and courtesy
It's your property but your agent has to always remember that whilst your tenants are paying you to live there it's their home. If the agent doesn't maintain a high level of respect and courtesy with the tenants they can become difficult and obstructive. Now whilst this would appear to be common sense we have heard countless stories of agents taking the attitude 'you're just the tenant so you don't have any rights and we don't have to respect you' which couldn't be any further from the truth.
The subtlety of language
When requesting viewings with the tenants an agent should say 'is it ok if we show someone around YOUR property'. This subtle acknowledgement that whilst they are renting the property it is technically theirs shows respect and can make a huge difference in the agent/tenant relationship.
What are common causes of tenant complaints?
- Not being told about viewings and having agents and viewers enter their home announced.
- Not being told that a pre-arranged viewing has cancelled. The tenant may have specifically tidied up and structured their day around the visit to then find themselves waiting for the agents arrival which never happens.
- Finding that things have been moved in their home, lights left on or locks not locked.
- Having a continuous stream of people visiting the property at all times of the day.
- Being kept in the dark on the progress of the sale.
What works best?
Your agent needs to keep the tenants fully aware of all developments and ensure that they give them a minimum of 24 hours notice of any visits to the property. We find that what works best is agreeing two 2 hour slots with the tenants for access to carry out viewings.
Tenants rights
Most tenancies allow access to show potential buyers around in the last month of the tenancy however most landlords don't want to serve their tenants notice until a buyer is found or until the sale has progressed and is nearing an exchange of contracts so an agent is seeking the tenants cooperation to allow people to view the property even though no formal right to do this exists. Even during the last month of a tenancy, where an access clause exists, the tenants can legally refuse access and there is nothing that you nor your agent can do about it. If you or your agent ignores the tenants instructions not to enter the property you could be committing a criminal offence so you can see the importance of maintaining a good relationship with the tenants.
Vacant Possession
The ideal scenario for a property owner is to exchange contracts, serve the tenants two months notice and complete the sale when the tenants have vacated. That way the owner receives rent right up until the day of completion. Unfortunately there are many reasons why this ideal scenario is rare.
The primary reason is that solicitors acting for both sellers and buyers don't like exchanging contracts whilst a tenant is living in the property because the contract places strict legal obligations on both parties which if a tenant refuses to vacate the property can lead to claims for breach of contract and liabilities for damages. It can also cause huge problems with mortgage lenders if monies are drawn down ready for completion and then completion cannot happen because the tenants have refused to move out.
There are ways to deal with these issues but your estate agent needs to be skillful to be able to agree a satisfactory solution with the parties involved.
Difficult tenants
Sometimes, but thankfully rarely, tenants are just very difficult and obstructive or they are messy and none of this is going to help you achieve a sale. In these instances you sometimes just have to bite the bullet and serve them notice so you can get the property vacant and then presented in its best light. Having 24/7 access to do viewings will also make it much easier to achieve a sale and it will give the buyers no uncertainty that the property can be bought without any hold ups.
We have a lot of experience selling properties with tenants in residence so if you are a Landlord looking to sell a property call us for a chat.