Anyone ever sell a rented house with tenants still in situ?

NIMAN

Was wondering how awkward it is to put a rented property on the market for sale with tenants actually renting the place?

I appreciate that they may have to show potential buyers around, or else agree to leave for a while if there is a viewing (not convenient).

Plus, you couldn't offer them a long term lease if they house can be sold under them.

Anyone have experience of doing this? There is the possibility of course that a potential investor may want to keep them as tenants if you recommended them?

matrim

I was in a situation like this (as the tenant) a while ago. We agreed to allow the EA to do a viewing every Tuesday. That way we knew to have the place in a good condition (and valuables hidden) and the EA knew we would be at work

We did agree a small rent decrease because of this inconvenience. And TBH except for the fact that we were planing on leaving anyway about 4 months after the viewing started we would have moved as it was a pain having to have the place ready every week.

Marcusm

OP

It's been done many times but please play nice by your tenants. Especially important as they have no obligation whatsoever to permit you even to take photos inside the property never mind that you cannot force them to allow any viewings whether they are there or otherwise. Nicely handled tenants may help you sell the house; badly handled ones can block a sale.

ted1

A new landlord will want new tenants to prevent exiting ones having rights from day one.

Agent J

If you sell a house with a fixed term lease still in place then the tenants can stay for the remainder of that term. Any potential new owner has to know this.

You'll read about part 4 tenancy and an exception for notice if selling. That does not apply under fixed term leases.

Let your tenants know what is going on.
You are going to need their co operation for viewing etc.Be prepared to offer rent reductions, buy out the lease etc if needed for the sale.

ted1

Agent J wrote: »

If you sell a house with a fixed term lease still in place then the tenants can stay for the remainder of that term. Any potential new owner has to know this.

You'll read about part 4 tenancy and an exception for notice if selling. That does not apply under fixed term leases.

Let your tenants know what is going on.
You are going to need their co operation for viewing etc.Be prepared to offer rent reductions, buy out the lease etc if needed for the sale.

Your allowed terminate a lease if you or a family member wants to move in to the house.

Agent J

ted1 wrote: »

Your allowed terminate a lease if you or a family member wants to move in to the house.

No. That's another one of those "Part 4 Tenacy " rules

See the list here.

http://www.citizensinformation.ie/en/housing/renting_a_home/if_your_landlord_wants_you_to_leave.html

See the different lease types here

http://www.citizensinformation.ie/en/housing/renting_a_home/types_of_tenancy.html

Fixed term leases cannot be broken without mutual consent or the the tenant having a rejected attempt to reassign the lease.

<edit>

For complete clarity on it see Threshold here

http://www.threshold.ie/page.asp?menu=70&page=241

Go to the "Notice of Termination" section

NIMAN

Do those Part 4 rules go by the wayside if I refuse to reduce the rent to what will be acceptable under the new rent supplement criteria?

I am being asked to reduce the rent by a significant amount for the tenant to qualify for RS. If I stick to my original monthly rent then the tenant will be forced to move out, according to the benefit people.

So surely in that situation this overrides any rule that they can stay?

Not too up to date with the whole Part 4 thing, but my property is leased on an annual basis with the signing of a 1 yr lease.

the_syco

NIMAN wrote: »

I am being asked to reduce the rent by a significant amount for the tenant to qualify for RS. If I stick to my original monthly rent then the tenant will be forced to move out, according to the benefit people.

If you plan on selling the house, and don't mind that you won't be getting any rent from the house for a few months whilst you're waiting for the house to be sold, raise the rent by €20

syklops

the_syco wrote: »

If you plan on selling the house, and don't mind that you won't be getting any rent from the house for a few months whilst you're waiting for the house to be sold, raise the rent by €20

How do you know it will only take a few months to sell the house?

It might be financially acceptable to go 3-4 months with no rent, but what if it takes 2 years to sell the house, can the OP take that financial hit? Meanwhile, he is dealing with an empty property. And if the OP is able to take the financial hit of no rent, why cant he bow to his tenants request to reduce the rent enough to make them elligible for rent allowance.

stargazer 68

Couple of years ago a neighbours house had tenants in it and they refused to reduce the rent so the tenants moved out. House went on the market and sold a couple of months ago at a significant loss. Just be mindful that it could take a very long time to sell.

matrim

The apartment I mentioned in my post is still on sale over a year later. It was one of 3 apartments that did similar and only 1 of them have sold so far.

NIMAN

I know its big risk these days to get tenants out while waiting to sell the house, which is why I would prefer it if the tenant stayed in the house while the viewings were taking place.

Of course, the tenant will know that they need to find another place asap, so there is a possibility that the house may lie empty for a while and cost me money.

I have to weigh up the risk of getting the tenant out and the house not selling.

the_syco

syklops wrote: »

How do you know it will only take a few months to sell the house?

Sorry, I meant at least a few months.

NIMAN wrote: »

I have to weigh up the risk of getting the tenant out and the house not selling.

I'd say keep the tenant, but reduce the rent in return for a break clause that allows you to give the tenant a months notice to leave? Check with a solicitor for the wording of it, but it'd probably be in your best interest to keep them paying rent.

Have you inspected the house recently? Is it clean and looked after? Is it something that you'd feel comfortable showing off to potential buyers?

djimi

the_syco wrote: »

I'd say keep the tenant, but reduce the rent in return for a break clause that allows you to give the tenant a months notice to leave? Check with a solicitor for the wording of it, but it'd probably be in your best interest to keep them paying rent.

Is this even legal? You can put in whatever clause you like into a lease but by law you cannot break a fixed term lease unless the tenant gives you good reason to, and Im not sure that anything put into the lease to say otherwise actually makes a difference to this.

the_syco

djimi wrote: »

Is this even legal?

Not sure, thus why they'd need to talk to a solicitor about it.

djimi wrote: »

you cannot break a fixed term lease unless the tenant gives you good reason to

You could be right, in which case the OP should not give the tenant a fixed term lease, but again, talk to a solicitor to get a lease made up that will allow you to give the tenant a one or two months notice to leave should you get a sale. The tenant would probably sign this new lease as it'd have the rent lessened.

djimi

the_syco wrote: »

You could be right, in which case the OP should not give the tenant a fixed term lease, but again, talk to a solicitor to get a lease made up that will allow you to give the tenant a one or two months notice to leave should you get a sale. The tenant would probably sign this new lease as it'd have the rent lessened.

Im fairly sure that you cannot write something into a lease that goes against the law. Even if the tenant signs and agrees to it it doesnt make it any more legal. A solicitor is the best person to ask though.

The way I see it the best thing to do is let the current fixed term elapse and then have the tenant go into a part 4, which allows the landlord to terminate the tenancy if they wish to sell the house. I do however seem to remember reading though that if a tenant wants another fixed term that you must provide this for them, so Im not sure how it works exactly with this...

not even wrong

djimi wrote: »

Im fairly sure that you cannot write something into a lease that goes against the law

This is correct in general, statutory law can and does override contract terms. However there is nothing against the law about having a break clause in a fixed term lease, it's fairly common practice.

If that break clause comes up against a Part 4 tenancy it will be unenforceable of course, but a Part 4 tenancy can be terminated if the landlord wants to sell anyway. So it makes no difference for the purposes of this thread.

Agent J

NIMAN wrote: »

Do those Part 4 rules go by the wayside if I refuse to reduce the rent to what will be acceptable under the new rent supplement criteria?

I am being asked to reduce the rent by a significant amount for the tenant to qualify for RS. If I stick to my original monthly rent then the tenant will be forced to move out, according to the benefit people.

So surely in that situation this overrides any rule that they can stay?

Not too up to date with the whole Part 4 thing, but my property is leased on an annual basis with the signing of a 1 yr lease.

If there is a fixed term in place then it is not a part 4 Tenancy.

A part 4 is like a default tenancy. If a fixed term exists then it is instead of that. If the fixed term lapses then it reverts to part 4.

If the lease says 1 year from X to Y then you cannot move the tenants before Y without consent.

quietsailor

Agent J wrote: »

If there is a fixed term in place then it is not a part 4 Tenancy.

A part 4 is like a default tenancy. If a fixed term exists then it is instead of that. If the fixed term lapses then it reverts to part 4.

If the lease says 1 year from X to Y then you cannot move the tenants before Y without consent.

Why not talk to the tenants and see if they want to re-sign a new lease. Q for the more knowledgeable among us - Can't a fixed term lease be broken if BOTH sides agree to break it?

If you can break it with mutual consent then ask the tenants do they want to sign a 4 week/6 week/8 week rolling lease (whatever suits you both) for a reduced rate - you could;
- agree fixed days for viewings with a 24 hr notice in this so the tenants will know when your calling.
- Ask them if they want a bit extra knocked off if they are willing to spruce up the place before any viewings ie a cleaning bonus (you'd have to agree what you expect though. Might be better to pay that after the viewing though - that way they do have an incentive to clean the place.
- Both you and the tenant know that you'll have a notice period so they won't be immediately running out of the place in fear that you'll suddenly ask them to leave and you'll know you'll get a minimum of notice and rent before they do leave

NIMAN

Thanks all, plenty of good advice.

Agent J

quietsailor wrote: »

Why not talk to the tenants and see if they want to re-sign a new lease. Q for the more knowledgeable among us - Can't a fixed term lease be broken if BOTH sides agree to break it?

That would be the "With consent" part as previously mentioned.

The Landlord just needs to tread very carefully on this one.

shansey

Hi all,

I know this is an old thread but I can't seem to find anything newer.

Our lease is up in June and the Estate Agent has just said that the LL is thinking of chancing the market.

We have been there more than 6 months and as you all know this gives rise to a Part 4 Tenancy!! (Rights that co-exist with the Lease)

The section that deals with termination in the Act (i think s.34) states clearly that the LL must be going to enter into a binding contract for sale within 3 months.

So would I be right in saying "thinking of chancing the market" is not sufficient grounds to terminate a Part 4?

djimi

I would have thought so, yes. Terminating a lease because you are selling the property (ie have found a buyer and are about to sign contracts) is very different from terminating a lease because the seller decides to test the waters and throw and ad up on Daft to see what offers they might get!

Threshold would probably be the best people to contact for clarification.

shansey

Thats what I thought. They actually have a show house they can use to show prospective buyers anyway.

I think I'm gonna stand my ground on this one!

djimi

I would get a second opinion from Threshold before deciding a further course of action to take.