Advice: selling house with tenant

[kwijjibo 10]

Hi. We are wanting to sell our buy to let property but we have a tenant.

 

How would we go about selling it?

 

Any advice welcome

[Jeffrey Shaw 90]

1. You can sell it as normal.

2. But clearly any prospective P will have to be told that internal inspection is either not allowed or needs T's advance consent.

3. The sale contract will state that V [you] do not sell with vacant possession but subject to T's tenancy.

4. So that's similar to selling a freehold reversion (= subject to a long lease).

5. P will need to see a copy of the Letting Agreement.

6. On completion, P pays the balance completion money as normal.

7. But there's also an apportionment (allowance from you to P or extra payment from P to you).

8. That will depend on whether T has paid to you as L all rent up to:

a. a date short of the sale completion date; or

b. the exact sale completion date (inclusive); or

c. a date beyond the sale completion date.

9. P will need from you on completion a Letter of Authority. This is from you (or your solicitor), addressed to T, and tells T that thenceforth all rent is to be paid to P.

Edited February 19, 2013 by Jeffrey Shaw

[Kaye2812 10]

We sold a rental house with tenants in it back in 2006. We decided to put it to auction due to it being tenanted and went with Mark Jenkinson auctions and it sold very well - despite no-one actually viewing the property.

 

Our solicitor sorted all stuff needed for the auction and also sorted out all the money to do with the rent etc. It was the least stressful house sale we have ever done as the time to completion was short and there was no worries about the buyer backing out at the last minute as exchange of contracts takes place on the day of the auction.

[Jeffrey Shaw 90]

Yes, although that last bit re exchange of contracts is of course true of any auction sale.

[poppet2 13]

We sold a rental house with tenants ... despite no-one actually viewing the property.

 

It was the least stressful house sale we have ever done as the time to completion was short and there was no worries about the buyer backing out at the last minute as exchange of contracts takes place on the day of the auction.

 

It's surprising how people at auction take a gamble by not even viewing the property they buy. What if there was subsidence or some other major structural defect or the description given was false? Wouldn't that come under fraud, despite the caveat of buyer beware?

 

I'm surprised the exchange of contracts takes place on the actual day. Isn't it common to allow 28 days for this to happen, even at auction? Odd that this restricts a buyer from backing out, by exchange of contracts taking place on the actual day of buying at the auction. Was it a cash transaction?

[Jeffrey Shaw 90]

It's surprising how people at auction take a gamble by not even viewing the property they buy.

Yes, so am I.

 

What if there was subsidence or some other major structural defect or the description given was false? Wouldn't that come under fraud, despite the caveat of buyer beware?

No. As long as V has not told any untruths, it's up to P to make appropriate investigations and pay for survey etc.

But the Auctioneers might be liable if they gave false information knowingly or recklessly.

Their liability is civil (tort)- or possibly criminal; but it's not based on the contract- to which they're not party.

 

I'm surprised the exchange of contracts takes place on the actual day. Isn't it common to allow 28 days for this to happen, even at auction? Odd that this restricts a buyer from backing out, by exchange of contracts taking place on the actual day of buying at the auction.

A misconception, there. Exchange of contracts in a 'private-treaty' case is just like the fall of the hammer.

Completion, on the other hand, takes place on whatever date the contract stipulates.

 

Was it a cash transaction?

That's irrelevant. The same rules apply whether P is paying cash or using a mortgage advance.

Edited February 20, 2013 by Jeffrey Shaw

[Kaye2812 10]

We were also very surprised and had considered pulling the property out of the auction thinking that it wouldn't sell, but it sold for the middle of the guide price range that Mark Jenkinson had valued it at. Luckily for the buyers it was in good condition, especially in comparison to a lot of the properties which go to auction!

 

The buyers did get a mortgage for the property by the way as that delayed completion by a few days.

[Jeffrey Shaw 90]

The buyers did get a mortgage for the property by the way as that delayed completion by a few days.

Mortgaging can be a problem, given the fixed timescale towards completion. There are few short-stay lenders prepared to assist (at a price!) in order to tide-over a purchaser unable to obtain a 'proper' long-term mortgage advance in time. Despite high interest rates, such short-stay lenders might be better than P having to pay to V interest for late completion.

[gym_rat 10]

1. You can sell it as normal.

2. But clearly any prospective purchaser will have to be told that internal inspection is either not allowed or needs tenants advance consent.

3. The sale contract will state that vendor [you] do not sell with vacant possession but subject to tenants tenancy.

4. So that's similar to selling a freehold reversion (= subject to a long lease).

5. P will need to see a copy of the Letting Agreement.

6. On completion, purchaser pays the balance completion money as normal.

7. But there's also an apportionment (allowance from you to purchaser or extra payment from purchaser to you).

8. That will depend on whether tenant has paid to you as landlord all rent up to:

a. a date short of the sale completion date; or

b. the exact sale completion date (inclusive); or

c. a date beyond the sale completion date.

9. purchaser will need from you on completion a Letter of Authority. This is from you (or your solicitor), addressed to tenant, and tells tenant that thenceforth all rent is to be paid to purchaser.

 

 

re - posted it for you

 

 

you have no idea how annoying your posts are with all this T & L rubbish you use, it doesn`t make you look any more knowledgeable and makes a mockery of the no TXT speak rule.

 

 

happy to help.

[Jeffrey Shaw 90]

OR

You have no idea how landlord and tenant law works. The abbreviations L and T are standard and hardly 'textspeak'.

More importantly, have you anything of use to add to the topic in advising OP?