Selling rented property-can landlord pay tenant to stay?

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    Selling rented property-can landlord pay tenant to stay?

    Just over a year ago I let out my former home and I now need to sell it. The tenants are very good and I'd like to hold onto them as long as possible. I guess from their point of view, though, they might want to move on once they learn I'm putting the house on the market.

    Is it usual in these circumstances to offer a reduction in rent as an incentive for tenants to stay? If so, any ideas as to how much as a percentage?

    I suppose accepting a firm offer for the sale would be the right time to issue the termination notice? That would be two months, so aim to exchage contracts after that?

    I suppose if the sale falls through I'd be stuck, as new tenants would be in for a minimum of 6 months.

    Grateful for any thoughts. Thanks.

    If the tenants are currently within the fixed term of an AST, when it scheduled to end and does it have a break-clause?

    If it's a periodic tenancy, keep it that way and don't issue a new AST.


      Thanks for your reply Beeber!

      The current tenancy (12 months) ends late April. Yes, it does have a break clause.

      ...And you focussed my attention on the obvious! If I get a buyer in the next month it will probably be around the end of the tenancy anyway. In that case, is it possible to extend a tenancy on a short-term basis: i.e. a couple of months at a time?

      Unsure about definition of a 'periodic tenancy'.

      Cheers again.


        If you let the fixed term AST expire without issuing another, it automatically becomes a periodic tenancy which means it carries on under the existing terms and conditions and can be ended if the landlord issues 2 months notice to the tenants or the tenants issues 1 month to the landlord, timed with when rent is due.

        It is a common practice for landlords to issue an initial 6 month tenancy agreement and then let it roll into a periodic tenancy as it offers flexibility to the landlord when they can serve notice rather than being locked into a long fixed term contract.

        I am not sure that you could serve your tenants notice within a fixed term contract (break-clause excepted) but more experienced posters can advise on this.


          Thanks again

          Thanks very much Beeber. That's all very useful information.

          Best regards


            Perhaps I can offer from a tenant perspective?

            Apart from 1 property - all the properties I have rented over the last 10 years have gone on to be sold.

            I've asked time and again of landlord and agency whether it's going to be a long-term let and always insist on at least 1 year - but mostly during that year I've been given notice that the property is being put on the market. I've been an increadibly tolerant tenant of all this but I do know people who play hardball and in many ways - I agree with them.

            In my case it costs over £400 each time to move and days of leave packing, unpacking and ringing to change utilities, address and DDR etc.

            Whilst I appreciate that a LL owns the property, I have recently written to my MP and others to ask that this issue be addressed.

            I think, if you are a decent LL, then it would be nice to offer compensation of some sort for the fact that they are going to get numerous calls day and evening whilst at work or going out for viewings - often despite insisting on 24 hours - agencies chance it that you'll be there and send clients round anyways. Weekends are peak viewing times - and invariably the tenant is around and has to make themselves scarce. It's also annoying to have to try and keep a premises "spick and span" for a viewer when you're leaving there and would quite like to leave that splat of tooth paste behind when you rush to work or the washing-up in the sink.

            Plus, and this is something I really have a problem with - years ago someone stole my bank details - from the premises I was letting - I had files with my banking stuff - and they nicked it - and got access to my account - also by knicking my utility bills. Took over a year to get the person - and my time - and worry - not the LL.

            When the LLs I've been with have put on the market - I've had to hide stuff or remove off-site to ensure this doesn't happen again - because my contents insurance demands that I do!! I've even had to rent storage to put my files.

            I would like to see something put into law about LLs selling with tenants in - that they do offer compensation - I think it is only fair, particularly if the tenant is like me - and asks in advance for a long-term rental and a secure home during that time.

            I'm not one of them but I do understand many tenants who actually deliberately leave the place in a total state - to put off buyers. Plus some who play the game by not leaving despite being issued notices.

            I totally understand why they do this - it's such a hassle constantly moving because a landlord wants to sell after 6 months of you being in.

            Most agents refuse me 1 years agreement these days - and my last LL - after having me moved in tried to take me to court to get the 1-year agreement reduced to six months on the ground he hadn't signed the agreement and that the LA shouldn't have let for 1 year. He lost - but it was hassle and contacting and paying for solicitors that drove me nuts.

            Just my perspective - and it's now happened to me so often - that I'm getting more militant - I won't allow viewings at all now during my tenancy - and my solicitors support me in that. If a tenant refuses access during their term - there is nothing you can do about it as they have the right to "quiet enjoyment" - and Eas and viewings interupt that right.

            You are obviously trying to hedge your bets and keep the nice tenants in for as long as possible whilst selling with minimum empty time - but you need to weigh it up - and understand your tenants - and at least be good to them - so that they will cooperate with you.

            Also bear in mind, whilst to you it's just a property to me where I lay my hat and put my stuff - it's my home - it's all I can afford - and I try and make it as nice as possible and most of us renters - don't want to leave!!!

            Just my opinion.


              Thanks for your reply Heather5

              It is very useful to get a tenant's perspective. I can appreciate how disruptive and costly it must be for tenants to have to move on so regularly.

              Quite apart from providing an incentive for my tenants to remain in the property whilst it is up for sale, it is indeed my intention to provide some financial compensation for the disruption caused by potential purchasers viewing, etc. My tenants have been very reliable all along and we have a good relationship so I want to be open with them about my plans as well as to show recognition for their co-operation.

              You make an excellent point about security (I'm sorry to hear about your experience). It hadn't occurred to me, so I'll have to take all the necessary precautions on their behalf.

              I've only recently begun to think about the issues but I do agree that there should be something in law to look after tenants (and indeed LLs) when properties are put on the market.

              Thank you once again, Heather, for your insghtful response.


                Be careful about exchanging contracts stating vacant posession, as you cannot be certain that your tenants would leave when they've agreed to. Would you be looking to sell the property as a going concern? Perhaps your tenant wants to stay on and would be ok with a change of landlord?


                  Thanks for your reply Surrey

                  Appreciate your tip about vacant posession. I'll discuss that with my conveyancer when the time comes.

                  Good point about possibly selling as a going concern. I'll speak with my letting agent about that.

                  Thanks again


                    Originally posted by heather5 View Post

                    I would like to see something put into law about LLs selling with tenants in - that they do offer compensation - I think it is only fair, particularly if the tenant is like me - and asks in advance for a long-term rental and a secure home during that time.

                    I agree about the compensation: councils for years have paid out £1500 homeloss allowances plus removal costs when they demolish properties forcing tenants out.

                    Although council tenants obviously have more rights, the circumstances for the tenants are still the same.

                    Landlords that keep selling on give private renting a bad name! I reckon a fair compromise would be a few hundred quid following the sale of a tenanted house to the tenant.


                      Just experience I've been through - in the last few years particularly - LLs like yourself have thought of selling as a going-concern.

                      However, despite going through the process - ALL have ended up selling on the open market - with me out.

                      It was really annoying - having people viewing saying they would be prospective LLs but most of them came round just to see if they were getting the right money for their properties - and to see what the competition was like.

                      May also depend on the type of property - and who they market to. I know of a few friends who've been in the same situtation - and in each case the property went to a first-time buyer - who couldn't afford their own property to live in but used it as a possible first step to buying for themselves - but then again - that was a few years ago now when people could get btl mortgages relatively easily.

                      I will say that, as in the current climate, depending on the property - it may move slowly - and I didn't want to move out in advance unnecessarily - so I approached the LL, agreeing to move out once they had exchanged contracts and agreed the exchange date.

                      Most have been happy with this unless they were sitting on a sure-fire sell. One property I rented was on sale within my 6 months contract - but on this basis I didn't move out for 18 months in total - because it took over a year to sell - plus several pull-outs very close to exchange.

                      On average, with LLs happy to accept this, I've moved out on average I would say 8 months after the property went on the market.

                      However, one thing I have found is that Letting Agents don't like you to approach the LL to arrange this type of agreement - and they want their cut - and will sometimes try to issue contracts - against the LL wishes and tenant's agreement with the LL. This is particularly the case when the LL goes with an EA that is not associated with the LA. I'm clued in - and I refuse - and refer them to the LL - but several have tried badgering tactics to get me to sign. Counter productive in all cases - and possibly illegal.

                      In all of these cases - I've never signed a THING!!! I've agreed verbally - and it's accepted - and the LL has kept in touch - and it's all worked out well. But then I like to think that I'm a decent person who despite all the hassle totally undertsands that LLs have reasons to sell.

                      On one occasion I was almost ready to go - and then the prospective new owners pulled out after exchange - and I got a reprieve but had to weigh it up over costs of staying vs going - and now adays - I only look to move 4 weeks on actual move date - risky in some places - but then I also am prepared, and have done, to put everything I have in storage - including my piano (which HATES being moved) - and rented a room in some awful places for a few months with some very strange characters (learning curve!).

                      If you have nice tenants - perhaps you can suggest this - and if you are nervous - perhaps get them to sign something saying that they would move out to the effect. However, I'm not sure the legal stuff of doing so - other knowledgeable LLs on this site will advise (that's the great thing about this site). Does this count as an addendum - or if you roll over on a monthly periodic contract - it counts - but as I said - I literally agreed to move out as late as possible - and it could have been two weeks - but never ever has been!!! Even when dates are agreed - they seem to shift.

                      Good luck - and it's nice that you are thinking and taking advice on this in advance - wish more would do the same.


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