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Buying or selling a property with tenants?

If you’re buying or selling a house with tenants in it, there are some things you need to bear in mind. Buying or selling tenanted property can be a bit different to buying or selling a home of your own – and here’s our checklist of key things to consider.

Buying a home with tenants

Vacant possession or not?

You may have a choice of whether to keep the existing tenants or take vacant possession. Tenants on a Periodic Tenancy can be given 42 days notice by the existing owner. This can be built into your settlement period, if you want to take vacant possession.

Tie up the paperwork

If you make a decision to keep the tenants, it’s important to get their paperwork in order. You’re going to need a copy of the existing tenancy agreement; the bond will have to be transferred to you; and the tenants will need to be notified that you are going to be their new landlord. You’ll also need to work out how you’re going to manage the property; who they should contact with any issues; and where the rent needs to go.

Keep it legal

It’s important to make sure you get to carry out the inspections that you need to – before you settle on the property. You’ll need to work closely with your solicitor to make sure that any final inspections, meth testing or bond transfers are included in the conditions of your sale.

Keep an eye on your budget

Once you own a rental property, it’s important to keep it in order. Remember this is a home for your tenants. Make sure you set money aside to pay for day-to-day repairs and the ongoing maintenance of your house.

 

Selling a home with tenants

Vacant possession or not?

If you’re selling your rental property, you may have a choice about whether to give your tenants notice or let them stay. Obviously, it’s good to be able to keep rent coming in right up until the point when you sell your property.

Consider whether your tenants are going to make it easy for people to view your property. It’s important to offer flexible viewing times and, of course, present the property at its best. On the other hand, keep in mind that some prospective buyers may be more inclined to buy if the tenants are already signed up and happy.

Tie up the paperwork

If you sell your property with the tenants in place, you’re going to need to transfer the paperwork. Check with your solicitor to make sure you cover all your bases. Important things to remember include: notifying your tenants of the change of ownership; sharing a copy of the tenancy agreement with the new owner; and transferring the bond across to the new landlord.

Keep it legal

If you’re selling and your tenants are moving out, make sure you include their notice period as part of your settlement timeline. You don’t want to incur the cost of selling the house as vacant and then have to compensate the new owners when you still have tenants in place.

Whether you’re buying or selling a home with tenants, it’s important to have good legal advice. Make sure your solicitor is aware of your position and let them know upfront about any worries or concerns you may have. Then you can make sure you’re in the best legal position for the sale or purchase ahead.

 

An Adviser Disclosure Statement is available free and upon request.