Selling a house with tenants

We explain the pros and cons of selling a house with tenants in situ, how to manage the process if you’re selling with vacant possession and whether getting short-term tenants while selling could offer the best of both worlds.

Rebecca Gamble Consumer Journalist

Can a landlord sell a house with tenants?

Yes, a landlord can sell a house with tenants although the process works differently depending on whether the landlord is selling the house with tenants in situ or with vacant possession:

• Selling a house with sitting tenants means the property is sold with the tenants still living in it and the new owner becomes the landlord. It’s also known as selling with tenants in situ.

• Selling with vacant possession means the property must be empty of occupants and their belongings by the completion date, with the exception of items agreed in the contract. Click here to jump down to find more on how this process works.

Selling a house with sitting tenants

In most cases, the ideal situation is to sell a house with vacant possession. But that’s not always possible and there are some benefits to selling a house with sitting tenants. Here’s what to weigh up.

Pros and cons of selling a house with tenants

If you’ve got a Buy to Let with tenants and want to sell, you’ll need to weigh up the pros and cons of selling a house with sitting tenants vs selling with vacant possession:

Step-by-step process of selling a house with sitting tenants

If you’ve decided to sell your house or flat with sitting tenants, here’s how the process works.

Step 1. Notify your tenants

You should inform your tenants of your intention to sell your property. Explain that you intend to sell your property with them staying in it and that the buyer will become their new landlord and their tenancy will continue as normal.

Step 2. Decide how to sell

There are different ways to go about selling a house or flat with tenants in situ.

Using an estate agent

In most cases, the best way to sell a house with sitting tenants is via an estate agent. This is because you’ll reach the widest possible audience, which in turn means you may achieve a higher sale price.

Plus, a good estate agent should have local knowledge and expertise to value your property accurately. Read our guide How much should I sell my house for? and be proactive in reaching potential buyers.

But it’s important to make sure you find the best estate agent. Compare local estate agent success rate, speed of sale and track record on asking price using our free Best Estate Agent Finder tool. Make sure you choose an estate agent that is experienced in selling a house with tenants. Find out what else to ask in our guide Top tips: Key questions to ask estate agents when selling.

Selling at auction

If you want to sell the property quickly, you may consider selling at auction instead of using an estate agent.

• A major benefit is that the process is extremely quick. If there’s a winning bid, contracts are exchanged on the day and the buyer is legally committed to the purchase.
• But on the downside, you’ll limit your pool of potential buyers, so it’s likely that you’ll achieve a lower sale price. And auction fees are usually more expensive than estate agent fees.

Find out more in our guide on How to sell your house at auction. You might also consider selling via an online property auction, which work a bit differently. Find out more in our guide on Buying and selling with online property auctions.

Quick house sale firms

If you’re searching online about your options of selling a property with tenants, you’ll probably come across quick house sale firms offering to pay cash for your property. However, think carefully before proceeding – quick house sale firms will typically only offer 75% to 80% of your property’s value and there are other potential issues with them too. Find out more about what to watch out for in our guide on Quick house sale firms: what to beware of.

Step 3. Navigate potential pitfalls

Unless your tenancy agreement includes specific provisions, tenants aren’t obliged to allow visits for valuations, viewings, photographs and so on. However, the chances are your tenants be much more cooperative about the process if you handle it well and can show you’ve got their interests in mind:

• As a landlord, you should look at it through your tenants’ eyes: they are probably worried about the stability of their home and this can be made worse if it’s handled badly. So, tell them as soon as you can that you’re planning to sell. Ideally do this in person, although you should follow up in writing. And offer reassurance that their rights and tenancy agreement won’t be affected.

• Can you offer them first refusal to buy the property? It may be fairly rare but it does happen and it would make the process much smoother.
• You could try to aim to keep viewings to a minimum by holding group viewings and ask your tenants when is best for them.
• You could offer a reduction in rent to acknowledge the disruption and set out what you’d like in return, such as keeping the place tidy and allowing viewings. Put this in writing.

Step 4. Accept an offer and start the conveyancing process

Once you’ve accepted the offer on your tenanted property, your conveyancer will start the legal process of selling the property. Once you complete on the sale, the buyer will become the legal owner of the property and become your tenants’ landlord.

Compare conveyancing quotes from regulated and reviewed conveyancing solicitors that cover your area.

Document checklist for landlords

When selling a house with tenants in the UK there is additional paperwork you’ll need to supply as part of the sale including:

• The signed tenancy agreement
• Evidence of your tenants’ right to rent
• The inventory
• Gas and electricity safety certificates
• Energy Performance Certificate (EPC)
• Details of deposit protection
• Condition report and details of any repairs

Legal and financial considerations

When you’re selling a Buy to Let, you’ll need to consider:

• Tax implications: You’ll usually need to pay capital gains tax on property if you’re selling a buy to let property or second home. Capital gains tax is charged at 18% of any gain in its value above your CGT allowance (after any deductions have been taken off) for lower rate tax payers and 24% for higher rate tax payers. Find out more in our guide Capital Gains Tax on property when selling. For general capital gains tax advice, we recommend you speak to a financial adviser.
• Conveyancing process: Selling a tenanted property is more complex so make sure your conveyancing solicitor is experienced in this type of sale.
• Be prepared for delays: Selling a property with sitting tenants can take longer so be prepared for this when you put the property on the market.

Compare local estate agent success rate, speed of sale and track record on asking price using our free Best Estate Agent Finder tool.

Alternatives to selling a house with sitting tenants

So what’s the alternative to selling a house with sitting tenants?

Selling with vacant possession: How it works

If you’ve weighed up the pros and cons of selling a house with tenants in situ, you may choose it’s not right for you. In order to sell your property with vacant possession. Here’s how the process works

1. When to evict your tenants

• Selling with vacant possession means that when your sale completes, the property must be vacant of you, your tenants and all belongings, unless you’ve agreed with the buyer that certain items will be left behind.
• But while you and your tenants can stay in the property until a specified time on the completion day, it’s a high risk move to allow your tenants to remain in the property until then. That’s because if they don’t leave on time, you may be unable to complete the sale with vacant possession. This is likely to delay completion or result in a claim from the buyer.
• Even if they do leave, if your tenants leave behind furniture, rubbish or any items that stop the buyer from immediately using the property, the buyer could make a claim against you.
• It is therefore advisable to make sure your tenants leave before the exchange of contracts takes place.

2. How to evict your tenants

• The process of evicting your tenants and the amount of notice you’ll need to give will depend on your tenants’ tenancy type.
• Assured Shorthold Tenancy (AST) is the most common type of rental contract in England. To evict tenants, a landlord can give tenants a section 21 notice – a no-fault eviction – which gives the tenants 2 months’ notice. However, the landlord cannot evict tenants within the first 4 months of their tenancy. And if it’s a fixed-term contract, tenants have the right to stay for the duration of the fixed term, unless there’s a break-clause in the contract that says otherwise or unless they breach the terms of the agreement. Also, the Section 21 notice must be valid. Find more information on the government’s website.
• Regulated Tenancy Offers tenants greater protection however these are now fairly uncommon.
• Once your tenants have moved out you’ll be able to start the process of selling the house with vacant possession.

Compare local estate agent success rate, speed of sale and track record on asking price using our free Best Estate Agent Finder tool.

Getting short-term tenants while selling

Selling a house with vacant possession doesn’t mean you have to miss out on rental income if you think a short-term let is possible whilst you sell your home.

Our partners at Flyp.co offer a service where they will handle the sale of your vacant property and arrange a short-term let for you at the same time. They’ll also manage all the viewings and ensure that the property is cleaned and viewing-ready at all times.

Plus, they also offer a transformation service if the property needs sprucing up or staging to help it sell (at no cost to you). Flyp’s selling service also provides access to multiple agents at a sole agency fee, so they are worth comparing against other local estate agents.

Frequently Asked Questions