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Selling House with Tenants

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  • 13-10-2017 12:42pm
    #1
    Registered Users Posts: 1,041 ✭✭✭


    Is it a done thing to sell a house with Tenants in situ ?

    As in put the house up for sale to other landlords, ie "one rental property with tenants included"

    Would this attract a higher asking price or lower ?

    Have a rental property thats in positive equity at the moment and wonder how to maximise the return from a sale while causing the least amount of hassle for my current tenants


Comments

  • Moderators, Science, Health & Environment Moderators Posts: 23,218 Mod ✭✭✭✭godtabh


    Difficult to do to a private person. Banks wont give a mortgage without vacant possession.

    An investor is unlikely to give you want you think its worth.


  • Registered Users Posts: 461 ✭✭silent_spark


    Having tenants in situ will turn off owner-occupier cash buyers (for the hassle - when will the tenants actually leave?), and will exclude mortgage applicants (as the property needs to be vacant to draw down). I'm not sure how cash buy-to-let investors would view it, but why narrow your market?


  • Registered Users Posts: 1,041 ✭✭✭will56


    Cheers for the replies.

    It was just an idea that came to me the other week and I hadn't heard of anyone doing similar


  • Moderators, Science, Health & Environment Moderators Posts: 23,218 Mod ✭✭✭✭godtabh


    will56 wrote: »
    Cheers for the replies.

    It was just an idea that came to me the other week and I hadn't heard of anyone doing similar

    The reason should be clear now!


  • Posts: 24,714 [Deleted User]


    Its not a good way to sell a normal residential property as you are probably cutting off 90% of your market.


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  • Registered Users Posts: 1,041 ✭✭✭will56


    As I said, it was just an idea I had.

    Didn't know if there would be a market for investors or if it was even possible to get a mortgage to buy a property that way


  • Registered Users Posts: 1,891 ✭✭✭Stephen P


    I sold an apartment last year and the new owner wanted to keep on the tenants.  They were a cash buyer and obviously wanted the property as an investment.  I didn't advertise it that way, it just so happened someone was happy to keep the tenants in place.  They offered a good price with contents included so I took it.


  • Registered Users Posts: 181 ✭✭TresGats


    Houses with tenants in situ also seem to be priced around 20-30% cheaper. If it's anyway decent there should be no problem finding tenants if the buyer wants to let it. It's unfortunate for your tenants, but over-holders have scared a lot of people in the market.


  • Registered Users Posts: 1,447 ✭✭✭davindub


    will56 wrote: »
    Is it a done thing to sell a house with Tenants in situ ?

    As in put the house up for sale to other landlords, ie "one rental property with tenants included"

    Would this attract a higher asking price or lower ?

    Have a rental property thats in positive equity at the moment and wonder how to maximise the return from a sale while causing the least amount of hassle for my current tenants

    Your not supposed to give notice until you know you can complete the sale within 3 months. So you can probably put it on the market and ask the bid you intend to accept what their preference is. If the property is a little dated investors might appreciate not having to start renovations immediately.


  • Closed Accounts Posts: 6,926 ✭✭✭davo10


    davindub wrote: »
    Your not supposed to give notice until you know you can complete the sale within 3 months. So you can probably put it on the market and ask the bid you intend to accept what their preference is. If the property is a little dated investors might appreciate not having to start renovations immediately.

    This is incorrect. The LL does not need to "know" the sale will complete in three months, the actually wording is "intends" to enter into agreement to sell.

    See here:

    https://www.rtb.ie/docs/default-source/notice-of-terminations-landlord-word/sell-the-dwelling.docx?sfvrsn=2


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  • Registered Users Posts: 1,447 ✭✭✭davindub


    davo10 wrote: »
    This is incorrect. The LL does not need to "know" the sale will complete in three months, the actually wording is "intends" to enter into agreement to sell.

    See here:

    https://www.rtb.ie/docs/default-source/notice-of-terminations-landlord-word/sell-the-dwelling.docx?sfvrsn=2

    Im not entirely sure what you believe intend to mean, but if I intend to do something, I know i will do it?

    Anyway, the following is a extract from HC comments

    37. The reason must therefore be one of the six justifying reasons identified in the Table to s.34. In construing s.34, it cannot be ignored that the time frame of three months within which it is intended to sell is quite short, and in that context a landlord may terminate a tenancy on the grounds of an intended sale only if he has taken some preliminary steps to place a property on the market, as it would not always or perhaps usually be possible for an owner to predict that he or she would make an binding contract for sale within three months of placing the premises on the market. A landlord may not seek to recover possession of premises the subject matter of a Part 4 tenancy merely on account of a general intention on his part to sell the premises, and the intention must be to sell within three months and not merely, for example, to place the property on the market to test the market or to place the property on the market and wait a period of time until the appropriate price is achieved. The intention must be one to enter into a binding contract within three months of the termination of the tenancy, and that intention must exist before a notice of termination can validity be served. That in many cases will involve the requirement that the landlord has identified a potential purchaser, or commenced negotiations towards an eventual sale. Because of the short time frame of three months, it does not seem to me that the Oireachtas intended permitting termination of a Part 4 tenancy merely in anticipation of the commencement of the sale or advertising process. I would not go so far as to say that the intention was that a notice of termination could be served only in the context of an identified sale, but the legislation in my view envisages more that a mere intention to sell, and requires a landlord to have as a matter of fact, and to state, that he intends to bind himself to a sale within three months of termination.

    38. Thus, I consider that the operative reason for termination on account of ground 3 in the table to s.34 is not that the landlord intends to sell the premises, but that he intends to bind himself to a contract for sale within three months of termination. There is a difference in emphasis and meaning between the two statements of intent, and that difference is relevant and central to the protection afforded by the legalisation. An intention to sell simpliciter is not sufficient to terminate.


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


    will56 wrote: »
    Is it a done thing to sell a house with Tenants in situ ?

    As in put the house up for sale to other landlords, ie "one rental property with tenants included"

    Would this attract a higher asking price or lower ?

    Have a rental property thats in positive equity at the moment and wonder how to maximise the return from a sale while causing the least amount of hassle for my current tenants

    Speaking from the point of view of an invester. You are able to get buy to let mortgages with tenants in situ. Personally I prefer picking out my own tenants and would recommend selling with vacant possession even if it is geared towards landlords.


  • Closed Accounts Posts: 6,926 ✭✭✭davo10


    davindub wrote: »
    Im not entirely sure what you believe intend to mean, but if I intend to do something, I know i will do it.

    The RTB are clear on this matter, they require a statutory declaration that you intend to sell, not that the sale actually will complete in three months. Your ability/confidence to complete is immaterial. You may know you will do it, the buyer on the other hand has a lot more hurdles to cross which can cause delays.

    The words "intend" and "intended" are used several times in the HC paste you posted, nowhere does it say it "must" be completed, infact the first paragraph acknowledges that a sale can be delayed by circumstances beyond the sellers control. Surely you are not say you can control the purchase as well as the sale?


  • Registered Users Posts: 452 ✭✭__..__


    davindub wrote: »
    Im not entirely sure what you believe intend to mean, but if I intend to do something, I know i will do it?

    Anyway, the following is a extract from HC comments

    37. The reason must therefore be one of the six justifying reasons identified in the Table to s.34. In construing s.34, it cannot be ignored that the time frame of three months within which it is intended to sell is quite short, and in that context a landlord may terminate a tenancy on the grounds of an intended sale only if he has taken some preliminary steps to place a property on the market, as it would not always or perhaps usually be possible for an owner to predict that he or she would make an binding contract for sale within three months of placing the premises on the market. A landlord may not seek to recover possession of premises the subject matter of a Part 4 tenancy merely on account of a general intention on his part to sell the premises, and the intention must be to sell within three months and not merely, for example, to place the property on the market to test the market or to place the property on the market and wait a period of time until the appropriate price is achieved. The intention must be one to enter into a binding contract within three months of the termination of the tenancy, and that intention must exist before a notice of termination can validity be served. That in many cases will involve the requirement that the landlord has identified a potential purchaser, or commenced negotiations towards an eventual sale. Because of the short time frame of three months, it does not seem to me that the Oireachtas intended permitting termination of a Part 4 tenancy merely in anticipation of the commencement of the sale or advertising process. I would not go so far as to say that the intention was that a notice of termination could be served only in the context of an identified sale, but the legislation in my view envisages more that a mere intention to sell, and requires a landlord to have as a matter of fact, and to state, that he intends to bind himself to a sale within three months of termination.

    38. Thus, I consider that the operative reason for termination on account of ground 3 in the table to s.34 is not that the landlord intends to sell the premises, but that he intends to bind himself to a contract for sale within three months of termination. There is a difference in emphasis and meaning between the two statements of intent, and that difference is relevant and central to the protection afforded by the legalisation. An intention to sell simpliciter is not sufficient to terminate.

    Im sure all the climbers who intended to summit Everest know the difference between doing and intending to do. :)


  • Registered Users Posts: 1,447 ✭✭✭davindub


    davo10 wrote: »
    davindub wrote: »
    Im not entirely sure what you believe intend to mean, but if I intend to do something, I know i will do it.

    The RTB are clear on this matter, they require a statutory declaration that you intend to sell, not that the sale actually will complete in three months. Your ability/confidence to complete is immaterial. You may know you will do it, the buyer on the other hand has a lot more hurdles to cross which can cause delays.

    The words "intend" and "intended" are used several times in the HC paste you posted, nowhere does it say it "must" be completed, infact the first paragraph acknowledges that a sale can be delayed by circumstances beyond the sellers control. Surely you are not say you can control the purchase as well as the sale?

    I dont think you reasy either of my posts correctly. I have posted before the action that the LL must take if the property is not sold and I did not use the word "must".

    As per the hc You cannot show serious intention to enter into a binding agreement for sale within 3 months without knowlege that you can complete be sale. If you have ever purchased or sold a house you will know that 2nd hand sales do drag on.

    So at what point did you believe you can give notice before and after reading the HC comments?


  • Registered Users Posts: 1,447 ✭✭✭davindub


    __..__ wrote: »
    davindub wrote: »
    Im not entirely sure what you believe intend to mean, but if I intend to do something, I know i will do it?

    Anyway, the following is a extract from HC comments

    37. The reason must therefore be one of the six justifying reasons identified in the Table to s.34. In construing s.34, it cannot be ignored that the time frame of three months within which it is intended to sell is quite short, and in that context a landlord may terminate a tenancy on the grounds of an intended sale only if he has taken some preliminary steps to place a property on the market, as it would not always or perhaps usually be possible for an owner to predict that he or she would make an binding contract for sale within three months of placing the premises on the market. A landlord may not seek to recover possession of premises the subject matter of a Part 4 tenancy merely on account of a general intention on his part to sell the premises, and the intention must be to sell within three months and not merely, for example, to place the property on the market to test the market or to place the property on the market and wait a period of time until the appropriate price is achieved. The intention must be one to enter into a binding contract within three months of the termination of the tenancy, and that intention must exist before a notice of termination can validity be served. That in many cases will involve the requirement that the landlord has identified a potential purchaser, or commenced negotiations towards an eventual sale. Because of the short time frame of three months, it does not seem to me that the Oireachtas intended permitting termination of a Part 4 tenancy merely in anticipation of the commencement of the sale or advertising process. I would not go so far as to say that the intention was that a notice of termination could be served only in the context of an identified sale, but the legislation in my view envisages more that a mere intention to sell, and requires a landlord to have as a matter of fact, and to state, that he intends to bind himself to a sale within three months of termination.

    38. Thus, I consider that the operative reason for termination on account of ground 3 in the table to s.34 is not that the landlord intends to sell the premises, but that he intends to bind himself to a contract for sale within three months of termination. There is a difference in emphasis and meaning between the two statements of intent, and that difference is relevant and central to the protection afforded by the legalisation. An intention to sell simpliciter is not sufficient to terminate.

    Im sure all the climbers who intended to summit Everest know the difference between doing and intending to do. :)

    To use your own example. Standing at the bottom you state I intend to reach the top that in 24 hrs. It frequently takes 42 hours to climb. (I don't know how long it takes just using a example)

    Half way up you state I will reach the top in 12 hrs.

    What the hc is saying is don't state somehing you know won't be complied with. The hc generally rules out time travel, so what you know when you sign the declaration can change in the future. It can't be signed if you don't know how long it will take to sell.


  • Registered Users Posts: 452 ✭✭__..__


    davindub wrote: »
    To use your own example. Standing at the bottom you state I intend to reach the top that in 24 hrs. It frequently takes 42 hours to climb. (I don't know how long it takes just using a example)

    Half way up you state I will reach the top in 12 hrs.

    What the hc is saying is don't state somehing you know won't be complied with. The hc generally rules out time travel, so what you know when you sign the declaration can change in the future. It can't be signed if you don't know how long it will take to sell.


    You talk some load of sh1t in your numerous musings on the rental situation to be fair. But that's a classic.


  • Posts: 24,714 [Deleted User]


    davindub wrote: »
    I dont think you reasy either of my posts correctly. I have posted before the action that the LL must take if the property is not sold and I did not use the word "must".

    As per the hc You cannot show serious intention to enter into a binding agreement for sale within 3 months without knowlege that you can complete be sale. If you have ever purchased or sold a house you will know that 2nd hand sales do drag on.

    So at what point did you believe you can give notice before and after reading the HC comments?

    Your suggestions are unworkable. If you have tenants who require 6 months notice to move out you will likely need to give them notice before you even put the house on the market as it will need to be prepared for sale etc. Saying you have to sell within 3 months of giving notice is nonsense as it's simply nit workable with the rules of giving required notice etc.


  • Registered Users Posts: 1,447 ✭✭✭davindub


    __..__ wrote: »
    davindub wrote: »
    To use your own example. Standing at the bottom you state I intend to reach the top that in 24 hrs. It frequently takes 42 hours to climb. (I don't know how long it takes just using a example)

    Half way up you state I will reach the top in 12 hrs.

    What the hc is saying is don't state somehing you know won't be complied with. The hc generally rules out time travel, so what you know when you sign the declaration can change in the future. It can't be signed if you don't know how long it will take to sell.


    You talk some load of sh1t in your numerous musings on the rental situation to be fair. But that's a classic.

    Like wise. But all I do is deny loopholes idiots invent exist. But keep them coming.


  • Registered Users Posts: 1,447 ✭✭✭davindub


    davindub wrote: »
    I dont think you reasy either of my posts correctly. I have posted before the action that the LL must take if the property is not sold and I did not use the word "must".

    As per the hc You cannot show serious intention to enter into a binding agreement for sale within 3 months without knowlege that you can complete be sale. If you have ever purchased or sold a house you will know that 2nd hand sales do drag on.

    So at what point did you believe you can give notice before and after reading the HC comments?

    Your suggestions are unworkable. If you have tenants who require 6 months notice to move out you will likely need to give them notice before you even put the house on the market as it will need to be prepared for sale etc. Saying you have to sell within 3 months of giving notice is nonsense as it's simply nit workable with the rules of giving required notice etc.

    Thats the term inot the act. It states within 3 months.

    Note sale = contract not transfer.


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  • Registered Users Posts: 1,814 ✭✭✭mrslancaster


    ..."and the intention must be to sell within three months and not merely, for example, to place the property on the market to test the market or to place the property on the market and wait a period of time until the appropriate price is achieved"

    Should the property be sold below asking price? Can a landlord not hold out for the best possible price like any other seller?




    ...."The intention must be one to enter into a binding contract within three months of the termination of the tenancy, and that intention must exist before a notice of termination can validity be served. That in many cases will involve the requirement that the landlord has identified a potential purchaser, or commenced negotiations towards an eventual sale".



    How can a potential purchaser be identified unless the property has been advertised and potential buyers have viewed the property / had a survey etc etc

    The tenant has a right to peaceful enjoyment of the property so could refuse to facilitate viewings. Anyone who has ever sold a house knows it's a nuisance having viewings & strangers roaming through the house.

    If the tenant did facilitate viewings, would a potential buyer be happy to pay a deposit to the estate agent and wait until the tenants left before the sale process could move forward? As another poster said, that could be many months.

    Any opinions of how this would actually work?


  • Banned (with Prison Access) Posts: 16,620 ✭✭✭✭dr.fuzzenstein


    I'd say it depends. If a house was sold as a rental object, why not with tenants? Why the complication of getting rid of perfectly good tenants and then having to go through the whole FBI snoop through their previous landlords, their current job, their bank accounts, asking every agency if they've ever had rent allowance or disputes with other LL's.
    Unless the new owners want to live in the house themselves, that's of course different.
    And for example if it's an object with multiple units, certainly keep the tenants, it's the above hassle multiplied a million. You'd have to hire a staff of 10 ex gardai to hunt for tiny scraps of dirt (you owned a cat in 1998? Not in my flat, sunshine!)
    In Germany you're not even allowed to throw your tenants out just because you're selling. The old rental contract stays valid and you're also not allowed to jack up the rent beyond the legally allowed, which is like 15-20% in 3 years (that's actually more than Ireland now I understand).
    If you want to live there you will have to buy the house and then claim Eigenbedarf (need it for your own use).
    But the law states that selling up is absolutely no reason to turf out sitting tenants.
    This is very useful for multi unit houses and protects tenants rights, but can be difficult if you're selling a house with one flat rented out, but overall it's a good thing.
    Ireland has this obsession with turfing tenants out that I don't understand, some LL's on this forum even only giving 6 months contracts (unless I read that wrong). In Germany after 5 years you're only getting started.
    But I love the fact that rentals here come unfurnished, people even bring their own kitchen with them! It is normal that they would do up the gaff, painting, tiling, putting down floors.
    Its a totally different attitude.
    I certainly wouldn't come knocking on their door for a weekly inspection and remind them on that occasion that they're only guests in my house. ;)
    It's just an indictment of how fcuked up the attitude to renting is in Ireland, it's almost going out of one's way to make sure a tenant is very acutely aware that he's scum and nothing but an inconvenience and it would be much better if he could pay without actually living in the place.
    And the bank rules on selling with tenants are just official confirmation.
    Imagine selling a shop and the bank tells you "well first you have to tell all your customers to fcuk off and shop elsewhere and the new owner has to find a completely new customer base, we think that is the most sensible business model".


  • Posts: 24,714 [Deleted User]


    davindub wrote: »
    Thats the term inot the act. It states within 3 months.

    Note sale = contract not transfer.

    There is no way it can be applied to its simply unenforceable.


  • Registered Users Posts: 1,447 ✭✭✭davindub


    davindub wrote: »
    Thats the term inot the act. It states within 3 months.

    Note sale = contract not transfer.

    There is no way it can be applied to its simply unenforceable.

    There is no enforcement, at the moment it is up to the tenants to appeal if they believe the notice is invalid. Btw I noticed you stated 3 months from date of notice. It's 3 months from date of termination.


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