Question: I have tenants renting my flat and I want to sell it, but they do not want to move out. I wonder, could I sell the flat to an investor with the tenants still in occupation? What's the procedure?
Answer: You can sell with the tenants still there, but the sale is dealt with in a slightly different way. In a contract for the sale of residential property it is usual for there to be an express term providing that vacant possession will be given to the buyer on completion. However, if you sell to a buyer who is prepared to take on the tenants, the contract has to include an express term stating that the sale is subject to the tenancy. Often a copy of your assured shorthold tenancy agreement with the tenants is annexed to the contract.
Your solicitor should give the buyer's solicitor a copy of any inventory or schedule of condition relating to your flat which may be mentioned in the assured shorthold tenancy agreement, with details of the relevant tenancy deposit scheme, amount of the deposit, etc. You should serve a notice on your tenants advising them of their new landlord, and who the rent will go to in future. If managing agents look after the property for you and they have collected the rent, they would usually serve this notice.
The buyer's solicitor is likely to ask for a copy of the notice advising the tenants of the change of landlord and new arrangements for the payment of rent.
The buyer will probably wish to know if you have had any trouble with the tenants, such as non-payment of rent, and you must disclose this. You should ensure the deposit stays protected once the sale has completed.
The buyer should register an account with the relevant tenancy deposit scheme and you or your managing agents should arrange to transfer the deposit to the buyer's account upon completion.
What's your problem? If you have a question for Fiona McNulty, please email email@example.com or write to Legal Solutions, Homes & Property, London Evening Standard, 2 Derry Street, W8 5EE. We regret that questions cannot be answered individually but we will try to feature them here. Fiona McNulty is a partner in the residential property, farms and estates team at Withy King LLP (www.withyking.co.uk).