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Considering selling rental property tenant due to sign new lease.

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  • 23-04-2015 11:43am
    #1
    tweety76
    Registered Users Posts: 747 ✭✭✭


    Hi,

    My tenant is due to sign a lease in May for 12 months. It will be their 5th year in the property.

    We are considering selling the property although have a lot of groundwork to do on it first.

    What are the tenants rights if they sign the lease and we decide in 4 months that we are going to sell the property. How much notice do we have to give?

    Could there be any issues with them looking to see out the full 12 months contract?

    Thanks in advance.


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    #2
    Jasper79
    Registered Users Posts: 507 ✭✭✭Jasper79


    There is no need for a new lease they can stay on Part 4 Tenancy.

    Looking at the Citizens Information website notice is 16 weeks .

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


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    #3
    Fol20
    Registered Users Posts: 3,624 ✭✭✭Fol20


    You could always just let contract roll over.. Fixed term contracts don't mean much and as they are under part 4 tenancy at this stage, they are still required to give a few months notice. At least this way, you can evict them if you decide to sell the property. Your still required to give them a certain amount of notice depending on how long they have stayed there. If you sign a new 12 month contract, they are entitled to stay in the house for another 12months.


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    #4
    billythefish99
    Closed Accounts Posts: 92 ✭✭billythefish99


    You cant sell the property while the tenant has a fixed term lease.


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    #5
    Stheno
    Moderators, Business & Finance Moderators, Science, Health & Environment Moderators, Society & Culture Moderators Posts: 51,688 Mod ✭✭✭✭Stheno


    The tenant is coming to the end of their fourth year
    does part four not end after that time?


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    #6
    L1011
    Registered Users Posts: 68,910 ✭✭✭✭L1011


    Stheno wrote: »
    The tenant is coming to the end of their fourth year
    does part four not end after that time?

    Further Part 4 then starts and does not need a new lease but has a period where the landlord can end the contract with sufficient notice and no reason. The notice is quite substantial from memory, roughly 4 months.


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    #7
    Mrs OBumble
    Registered Users Posts: 25,967 ✭✭✭✭Mrs OBumble


    billythefish99 wrote: »
    You cant sell the property while the tenant has a fixed term lease.

    You can. However any buyer who needs to get a mortgage will not be able to buy it from you, because no bank will approve the sale with a tenant in place.

    Stheno wrote: »
    The tenant is coming to the end of their fourth year
    does part four not end after that time?

    That is correct. During the first six months of each four year period, the LL can end the tenancy without giving a reason. But they most still give the correct notice period (112 days, or less if mutually agreed).




    OP, if the tenant signs a new fixed-term lease, then you cannot end the tenancy during the period of the lease. Whereas if they don't sign, or if they sign a lease which just says it's a Part IV tenancy, then you can end the tenancy (with appropriate notice) at any time due to selling.


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    #8
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,285 Mod ✭✭✭✭The_Conductor


    tweety76-

    If you are serious about selling the property- advise the tenant that their lease will not be renewed, and that they should seek new accommodation. Once the lease has elapsed- give them their formal notice- ensure you do it properly- in writing- and meet all relevant guidelines.

    Even showing off a property to potential purchasers with a sitting tenant- is a nightmare- and will do you no favours.

    It is probable that the tenant will have difficulty finding new accommodation and may overstay their notice. You need to be cognisant of this.

    If you are selling the property- make sure its vacant- spruce it up- and get it on the market.


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    #9
    campingcarist
    Registered Users Posts: 337 ✭✭campingcarist


    Mrs OBumble wrote: »
    OP, if the tenant signs a new fixed-term lease, then you cannot end the tenancy during the period of the lease. Whereas if they don't sign, or if they sign a lease which just says it's a Part IV tenancy, then you can end the tenancy (with appropriate notice) at any time due to selling.

    However, I believe that if there is a suitable break clause in the fixed term lease then the landlord could break the lease.


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    #10
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,285 Mod ✭✭✭✭The_Conductor


    campingcarist wrote: »
    However, I believe that if there is a suitable break clause in the fixed term lease then the landlord could break the lease.

    It gets messy- and if the tenants get stroppy- you're in trouble.
    Its far easier not to go there at all- give the tenants their notice- and sell the property- or don't give the tenants notice- and don't sell. Its one or the other- in practice.


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    #11
    Uno my Uno.
    Registered Users Posts: 905 ✭✭✭Uno my Uno.


    Good lord there is a lot of misunderstanding about leases! Mrs O'Bumble and The-Conductor Have it right.

    OP if you agree to a new fixed term lease then you cannot get the tenants out of the property until that fixed term is up, ie they are entitled to stay for the full duration of the 12 months.

    Yes you can sell the house while the fixed term lease is running but the tenenats are unaffected by the sale, they continue living there and start paying the rent to the new owners. Obviously this greatly limits the numbers of potential buyers you will have as it is not suitable for owner-occupiers and is not suitable for a mortgage.

    You should decide to either sell or hold on to the property. if you decide to sell give the Tenants the appropriate notice and proceed. either way educate yourself on the 2004 Residential Tenancies Act. there are many good sources of information online, not least the PRTB.


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    #12
    tweety76
    Registered Users Posts: 747 ✭✭✭tweety76


    Thanks all for your detailed replies, very helpful.


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    #13
    MarkAnthony
    Closed Accounts Posts: 6,934 ✭✭✭MarkAnthony


    Notice during the first 6 months of the New Part IV is 28 days isn't it?


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    #14
    sunnysoutheast
    Registered Users Posts: 2,072 ✭✭✭sunnysoutheast


    MarkAnthony wrote: »
    Notice during the first 6 months of the New Part IV is 28 days isn't it?

    No it's 112 days for the first six months of a further part 4.


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    #15
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,285 Mod ✭✭✭✭The_Conductor


    Correct- the notice period doesn't wind back. You can however ask the tenant to leave, without reason- at any stage during the first 6 months (with the requisite notice). Whether or not they actually leave- is entirely a different matter.......


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    #16
    tweety76
    Registered Users Posts: 747 ✭✭✭tweety76


    OK, so to add further confusion to my initial question- I've just realised the tenants are entering their 4th year in the property not the 5th!

    I should add that we have no intention to sell the property at least for another 8-10 months( due to mortage issues and other restrictions) .

    So how does this change this for me? Am I correct in thinking I can issue a new 12 month lease and provide them with 3 months notice regarding my intention to sell?
    Thanks


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    #17
    Fol20
    Registered Users Posts: 3,624 ✭✭✭Fol20


    tweety76 wrote: »
    OK, so to add further confusion to my initial question- I've just realised the tenants are entering their 4th year in the property not the 5th!

    I should add that we have no intention to sell the property at least for another 8-10 months( due to mortage issues and other restrictions) .

    So how does this change this for me? Am I correct in thinking I can issue a new 12 month lease and provide them with 3 months notice regarding my intention to sell?
    Thanks

    Now you cant, once they sign a new lease and unless you have a specific break clause about selling your property, they can remain in the property until the house is sold. Just let the contract roll over and it will sort out all of your problems.


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    #18
    Uno my Uno.
    Registered Users Posts: 905 ✭✭✭Uno my Uno.


    tweety76 wrote: »
    OK, so to add further confusion to my initial question- I've just realised the tenants are entering their 4th year in the property not the 5th!

    I should add that we have no intention to sell the property at least for another 8-10 months( due to mortage issues and other restrictions) .

    So how does this change this for me? Am I correct in thinking I can issue a new 12 month lease and provide them with 3 months notice regarding my intention to sell?
    Thanks

    No you cannot, a fixed term lease cannot be terminated before the expiry of the fixed term!

    Educate yourself on the requirements of the 2004 Residential Tenancies Act, specifically part 4 tenancies.

    If you intend to sell the house in 8 to 10 months, leave the tenants where they are, and provide them with the appropriate notice (112 days if they are in their fourth year, off the top of my head) and ask them to leave.


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