Selling to tenants

[r3drover]

Hi, hoping you good people may be able to give me some advice 🙂

i have a rental property that I am now looking to sell. I am interested in selling to my tenants and have been looking at my contract with my letting agents to see if there are any consequences of this.

There’s no clause that would grant the agent a fee as part of the house sale, but there is a clause that states that letting fees remain payable for my tenants to the end of the current rental contract (that’s fine), for any future extensions (there won’t be any) or as long as they remain in the property (this is what I’m concerned about).

I understand the market standard is to pay the agent who found the tenants some fees for as long as those tenants rent the property (even if you change agents). This seems a little anti-competitive but I understand the rationale. But in my case - assuming the tenants buy the property - they would be remaining in the property and it seems the fees may still apply. Surely I can’t be liable to pay letting fees when I don’t even own the property any more and potentially for the rest of my life??

[Hudson01]

The original arrangement with the tenants, was it ia fully managed or tenant find only arrangement ? I have done this a few times on a tenant find basis and let all my AST's go periodic (so the tenants stay), i have paid zero to every agent, and they have never been knocking asking for any money.

[jpucng62]

Speak to your agent & ask them to put in writing what fees would be charged in the event of this happening.

[r3drover]

Thanks for both your replies.

It was fully managed.

yes I do plan to speak to agent. My concern is they will try and use it as leverage to insert themselves in the sale process. Just wondered if anyone else has hit anything similar?

[Hudson01]

You could simply say to them that from XXXX date the property will not be let as is has been sold....... that is all you say, no mention of the buyers being the in-situ tenants.

[DPT57]

You could simply say to them that from XXXX date the property will not be let as is has been sold....... that is all you say, no mention of the buyers being the in-situ tenants.

They'll serve notice on the tenants then.

[r3drover]

You could simply say to them that from XXXX date the property will not be let as is has been sold....... that is all you say, no mention of the buyers being the in-situ tenants.

that’s a good point. No need to say more than that. Thanks!

[Kape65]

Just tell them when it's sold. I'm sure if it went to court a judge would agree that "as long as they remain in the property" would mean as tenants not owners.