Thinking of selling a rented property with bad tenants? We look at your rights, remedies, and options.
Bad tenants can cause massive headaches for landlords. Whether it’s rent arrears or property damage, the issues caused by problem tenants can cause misery and despair. Unfortunately, the legal protections enjoyed by tenants can’t just be ignored because of issues. The process of removing bad tenants is a complex one, and it can become costly.
If you are contemplating selling a house due to nuisance tenants, it’s important to know where you stand legally. While selling your property might prove tricky, it is possible. In fact, there are buyers out there who are looking for properties with sitting tenants.
Why do tenants get nervous about a change of landlord?
You might have enjoyed a good relationship with your tenants in the past, but announcing that you’re selling up might change all of that very quickly. The tenant may become anxious about having to deal with someone else. They’ll be concerned about repairs in the future, as well as the possibility of being able to extend the rental agreement. There’s a chance that your tenants will stay in the property, but cause you problems in the meantime. There’s also a risk that the tenants will only give you notice and move out — leaving you without a rental income.
If your tenants decide to be willfully obstructive, they might refuse access to your property for viewings. Also, they might stop paying rent. The process for repossessing a home because of arrears is long and complicated — something many bad tenants will use to their advantage.
Is it possible to sell my property with the tenants still in it?
Yes, you are free to sell your property with the tenants still living there. The new owner will take responsibility for the existing rental agreement, and will not be able to make changes to it until the term has finished. However, you will need to be upfront and honest about both the agreement in place and the tenants. If you sell your property without informing the buyer of rent arrears or ongoing issues with tenants, you run the risk of legal action.
Fortunately, some owners actively look for properties with sitting tenants. If your problems are limited to contractual niggles or repeated requests for minor repairs to be performed, you might be able to find a buyer willing to take on the tenants — as long as the rent is up to date. Even if there are rent arrears, some buyers will still consider buying, although they will expect a significant price reduction.
Know your rights as a landlord
The legal rights of your tenants are in no way affected by your decision to sell. They are still entitled to privacy and a home in a good state of repair. Your tenant probably has an Assured Shorthold Tenancy Agreement, which means they have a legal right to live in the property until the contract term comes to an end. However, to get your tenants out on or shortly after that date, you will need to provide two months’ notice. As part of the agreement, you are also legally obliged to pay the security deposit into a protected scheme.
Despite your plans to sell up, your tenants have the right to “quiet enjoyment”, which means you can only turn up at their door and demand access. You can’t harass them in any way — even if you have prospective buyers to show around.
My tenant refuses to move out. What next?
Unless the term of the rental agreement is about to expire, your options are limited — mostly defined by the terms and conditions of the contract. To remove your sitting tenants, you will need to issue a S.21 notice, which gives the renter two months to vacate the property. However, merely issuing this notice doesn’t give you the right to enter the property and physically remove your tenants after the deadline has passed.
Unfortunately, you will need to begin legal proceedings for their eviction, and that can be a long and expensive process. Apply to the court for a possession order, but from the time of application, it could be several months before you’re allowed to remove your tenants with the help of bailiffs forcibly.
Note: Your tenants are liable for rent at the last agreed rate until the day they leave your property — even if they’re staying there beyond the date provided on the S.21 notice.
Am I able to sell my home when tenants refuse to move?
Yes, you can list your house for sale and sell it while you have bad tenants living there — even if they’re refusing to budge. However, you must inform any potential buyers of the situation right at the beginning of your dealings with them. If you have tenants who just refuse to leave the property, and they’re not paying rent, you face an uphill struggle to find a buyer, at least at the full market price.
If you’re trying to sell a property regardless, you will need access to it to show potential buyers around. But you can’t, under any circumstances, force your way into the property without the permission of the tenants. In this case, it is worth your while opening up a dialogue and attempting to strike a deal. For instance, you can offer a rent reduction or a promise not to chase arrears in return for access. Check the terms of the rental agreement, as this may provide you with temporary access to the property by giving notice.
I can’t afford to remove bad tenants using the legal process. What are my options?
Removing bad tenants with a possession order is a long and costly road to take. As well as legal costs and the costs involved in getting the property ready for the rental market again, you might face the prospect of covering mortgage repayments without a rental income. To avoid these costs, you can sell the house fast — but only if you find a willing buyer.
Finding someone to take on bad tenants on the open market will be a tough task, but you can bypass all of the pitfalls and complications involved and sell to a professional house buying service. These companies have the cash needed to get the ball rolling on home purchases immediately; they also have the resources necessary to deal with bad tenants. Another alternative is to sell at auction. Either way, you might be able to simply wash your hands of the entire problem in exchange for a reduced sale price.
If you’re selling a house due to bad tenants, you need to assess your legal position and proceed with caution to protect your interests.