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Tenants Rights When Selling UK Buy-To-Let Property

investing in property tips

Ensuring tenants’ rights has always been necessary when selling a buy-to-let property. However, Landlords must know they are even more so due to changes in the new UK Renters (Reform) Bill 2023, which is currently going through parliament.

If you’re a landlord planning on selling your property, you must know these rights to ensure a smooth legal process.

This article will cover this topic and provide an overview of some common reasons why countries, including the UK, have or are considering revising their tenancy agreements.

Let’s first look at the pressing event of selling your UK buy-to-let property with a sitting tenant.

Landlords

There are several reasons why your property may have a sitting tenant when you come to sell; perhaps you don’t want to wait for the current tenancy to end, or maybe the tenant has an assured tenancy that prevents them from evicted.

Whatever the reason, it’s essential to understand that tenancy agreements remain binding even when the property changes hands, so if you sell up, the tenancy agreement is still your responsibility until the moment of sale.

Tenants’ privacy and safety

The first thing to understand is that your tenants’ privacy is essential and must be respected.

A tenant’s agreement will include the right to ‘peaceful enjoyment’ of the property, so you cannot just arrange for prospective buyers or estate agents to view the property when it suits you.

You’ll need your tenant’s permission. Written notice must be given at least 24 hours before, and viewings should be scheduled at reasonable times.

When planning to sell your buy-to-let property, letting your tenants slip down your priorities is easy. However, to do so is at your peril, as they still have a right to live in a safe and protected environment. Right up to the moment of the sale, you must continue to deal with any repairs or maintenance and other tenancy obligations in due time.

You can be held accountable before the courts if you allow the property to become unsafe for tenants while it is still yours.

Communication and progress of the sale

Selling your buy-to-let property can be a stressful time for your tenant. So, if you decide to sell your investment property, talk to your tenant and reassure them about the process.

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Inform them about your intentions, provide updates on the progress of the sale, and address any concerns they may have. Not least, you’ll need their agreement to allow prospective buyers and estate agents to view the property. Still, a considerate approach can help maintain a positive landlord-tenant relationship during this potentially stressful period.

Evicting a tenant

As tempting as it may be to give your tenants notice when you decide to sell, you must act within the boundaries of the law.

In some cases, tenants may have the right to remain in the property even after it is sold. This is especially true for tenants with regulated or protected tenancies, such as assured tenancies. These types of tenancy are in place to provide more long-term security for tenants, and the sale of the property does not automatically terminate their rights.

When a buy-to-let property is sold, the existing tenancy agreements and terms are transferred but remain in effect. This means that the new owner becomes the new landlord and must adhere to the existing tenancy agreement until it expires or until both parties mutually agree to make changes. Make sure this is made clear to any potential purchasers of your property.

Abolishment of Section 21

If you decide to evict a tenant – to simplify the sale process, for example – the law currently states that you can issue a Section 21 notice for a “no-fault” eviction. This can be done as long as your tenant has been in the property for at least four months and is not currently in a fixed-term tenancy (unless there is a clause in the rental contract that says otherwise).

However, regulations are changing. The government has confirmed its plans to abolish section 21 in England under the Renters’ Reform Bill.

Once section 21 is abolished, landlords will always need to provide their tenants with a reason for ending a tenancy, for example, a breach of contract or wanting to sell the property.

Tenants can choose to end the tenancy at any time if they provide two months’ notice to the landlord. So, as a landlord, you’ll still be able to regain possession of your home; you’ll need a legitimate reason for doing so.

In conclusion, it’s important to remember that you cannot simply evict your tenants because you want to sell the property – they still have all the rights of their tenancy agreement during a property sale.

Experts

You would do well to familiarise yourself with the details of the tenancy agreement and the upcoming changes to laws and regulations to ensure you stay compliant and avoid potential legal issues.

Check out this Quick Move Now article for more information on selling your buy-to-let property.

Common Reasons For Rental Agreement Reform

Keep reading if you’re wondering why countries like Australia, New Zealand, Canada and the UK are revising their rental tenancy agreements now.

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The most pressing issue is in most countries, more people are renting due to a lack of home ownership affordability.

Did you know in 2004, twice as many people owned their homes?  Today, in the UK, far more people rent instead, which is why rental laws are changing.

Enhance Tenant Rights

Governments introduce reforms to strengthen tenant rights by providing greater security of tenure, restricting rent increases, or improving access to affordable housing.  As mentioned earlier, reforms also include protecting tenants when Landlords choose to sell their property.

Impose Tighter Landlord Responsibilities

Promoting fairness and a balance of power between tenant and landlord is a primary driver for tenancy agreement reform. For example, restricting rent increases and giving tenants more tenure security, i.e., they can not easily be kicked out.

Streamline Agreements

Tenants are often more transient than homeowners, and Governments see improving the rental agreement terms between tenants and landlords so they are consistent within the country essential.

There are many more reasons, too; needless to say, tenants have more rights with tenancy reforms like the UK Rental (Reform) Bill.

If you’re a landlord and thinking of selling your buy-to-let property, ensure you understand what you can and cannot do with your termination of the tenancy agreement.