Question: I have inherited a town house that has been divided into four flats. There are tenants in three of the flats, one of whom has been there for more than 20 years. I need to sell the property but my friends say this will not be possible because of the tenants. Is this correct?
Answer: Firstly, establish if there are written tenancy agreements and, if there are, consider their terms carefully. There may be no tenancy agreements at all, of course. In either case, seek legal advice to establish whether you can terminate the tenancies and how the notices to quit must be drafted and served.
The tenant who has been in the property for more than 20 years is likely to be a “sitting tenant” and so any sale would be subject to that tenancy and is likely to decrease the value of that flat. However, you may be able to reach an agreement with that tenant by finding alternative accommodation and/or by offering an inducement to leave.
Consider whether you wish to sell the freehold of the property or if you wish to sell the flats individually and retain the freehold. If you sell the flats individually you will need to grant long leases for each. When you market the property, do make sure that your agent is aware of the tenants. If a buyer wants vacant possession, to be safe, make sure the tenants have gone before exchange of contracts. There are many more options open to you than you might think, so do take some legal advice.
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Fiona is a partner in the property team at Thring Townsend Lee & Pembertons Solicitors www.ttuk.com.