Updating post from Reddit.
I have decided to sell my property which has been rented for the last 15 years - same tenant last 7 years. I have an agent who manages the property but I also have a direct relationship with the tenant which has been pretty good.
I have served a S21 notice to vacate at the end of the current term. The tenant seems willing to do so but are also finding it hard to secure a new rental in the area and have indicated that they may struggle to vacate by the due date. I know supply of rental properties is extremely short in my area so do not dispute what they are saying.
My question is how best to approach the issue if they cannot move out by the due date. As I will not be marketing the property for a few weeks I am unlikely to have sold by this date so, theoretically, I have no problem with them staying a bit longer. However I am concerned that, by allowing them to do so, I am effectively moving to a periodic lease and would legally have to serve 90 days notice from the start of the periodic lease should they start being difficult which could impact a potential sale.
I would prefer the have vacant possession at the end of the current AST but also want to be reasonable and helpful to the tenant if I can. I have no reason to think that the tenant would become difficult but have been reading so many horror stories on reddit of tenants refusing to move that I am concerned.
Is it possible to sign an agreement with them to protect me if I let them stay longer eg I say they can stay on a day to day basis but have to vacate in eg 2 weeks on demand if I find a buyer or would that be null and void as it goes against legislation on rentals? It seems crazy that legislation would stop me from being accomodating to my tenants but my first priority is to put myself in the best position to sell the property in a difficult market.
Any advice gratefully received.
There will be a shortage of rental properties at the low price and good condition that the tenant wants.
That is very different from there being an actual shortage of front of rental properties.
If you have managed the property correctly and the rent reflects market the tenant won’t see a much higher cost by moving.
The best thing to do is try and get them to give you notice .
Do the same search as the tenant and show them what the going rate is in that area. They will need to pay the going rate.
If they are paying a lower rate with you and you try to sell with tenant in situ you’ll get a lower sale price
I had this recently and I kept sending her properties and explaining that she had to compromise.
The notice period during a periodic tenancy is two months I think, not 90 days. However you have already served S21 so there’s no need to do it again when the fixed period ends. You can’t enforce any agreement that is not in legislation, so the only way you can get the tenant out if they are unwilling to go is by seeking an eviction order when the S21 notice period has elapsed. This could take several months at least. But selling with the tenant in situ is definitely an option - if they have a good payment record it should be fairly easy to find another landlord to buy, I have bought property with tenants in situ on several occasions in the past.
Yes, I think at the moment in England if the tenant stays after the AST contract term ends it becomes a rolling one month contract where the tenant has to give you, the LL one month notice to quit but you need to give the tenant 2 months notice. It is changing after the new law goes through.
Now is usually the start of the best time of year to market a property for sale and of course you may need to paint and decorate, sort out maintenance issues before marketing. To be very harsh if the tenant knows you are flexible some way in advance then the heat will be off them to find somewhere.
You do not want a day-to-day agreement, as at the end of the day, they could choose not to vacate. Then you have the buyer angry because they can't complete, as you can't provide vacant possession.
You have S21, give them time to find a property but if too long start court proceedings to gain possession.
I informed the tenants that I was selling the property and offered the house for the tenants to buy - they said they couldn't afford if even with a discounted price.
I discussed the options for ending the tenancy with flexibility from my end - we ended up agreeing to break the lease early and tenants vacated the property about 5 weeks before the fixed term and section 21 was due end.
I started the process of putting the property on the market only after the tenants were out. They were excellent tenants but I did not want to deal with the headache of finding myself with the tenants who refuse to leave while under the pressure to complete the sale. The section 21 notice simply gives an indication of when you can start the eviction proceeding if the tenants refuse to leave and having tenants in situ whether they have asked to leave or not will deter a lot of good buyers. I rather take the financial hit of having the property empty for few months.
Can you not sell the apartment with tenant in situ?
Do you have the advert of the apartment you can share the link if someone from this sub is interested?
Apartments/houses with tenants in situ typically sell for 20-30% less than those with vacant possession because yiu are restricting yournpotential buyers to btl investors. I suspect possibly even more so if the tenant is paying below market rent and refusing to leave.
That’s a fair point, well noted.
Something to consider - would the tenant be willing to buy the property?
We had the same with one of our tenants and after a bit of negotiation they bought it from us, seems like a win win scenario - though not always possible.
My advice would be to start the Possession Order process as soon as the Section 21 notice expires. if you let them stay you are starting a precedent with them so they have no incentive to go.
As u/jackiesear says "To be very harsh if the tenant knows you are flexible some way in advance then the heat will be off them to find somewhere...." Exactly.
The rental market is not going to get any easier. If they don't want to move out now, they aren't going to want to move out in a month or six months or a year. If they can't find somewhere now, it's going to be even more difficult next month...
You wrote:
"Is it possible to sign an agreement with them to protect me if I let them stay longer eg I say they can stay on a day to day basis but have to vacate in eg 2 weeks on demand if I find a buyer or would that be null and void as it goes against legislation on rentals? It seems crazy that legislation would stop me from being accommodating to my tenants but my first priority is to put myself in the best position to sell the property in a difficult market."
My advice would be: be very careful about signing anything, especially anything that could look like a "new rental agreement". If the tenants decide they are not going to move out, then anything you've signed suddenly starts to have legal significance beyond what you might have intended. Sign nothing atall unless you have legal advice to work out the implications.
You wrote "I have no reason to think that the tenant would become difficult..." - no , but the rental market is very hard at the moment. They might not be difficult but their situation is. Probably the tenant is going to have to move to somewhere which is not their preference. So it may take them some time to come to terms with that, and therefore they may prefer to sit in your flat for as long as they possibly can. The law will help them: there are huge backlogs in the court system, so it's really hard to get someone out who is inclined to stay. It takes over a year and costs thousands. (The tenant gets free legal advice.) Meanwhile you cannot sell, or even market the flat for vacant possession, because you have no certainty when they will move out. This was my experience.
Jut wanted to thank everyone for their comments. It looks like everything is going to work out and the tenants have found a new property and can move in before the lease ends. Big relief! Based on one comment below I have asked them to serve me notice once they have a move out date.