# Selling a Property with a Tenant in Situ



## Kine (29 Feb 2012)

Hi all,

I may be in the position where I have to sell my property over the next few months. My only concern is that I have a tenant currently in (started a 1 year lease last November) and I'm not 100% sure what I can or can't do? Up to now they have been a good tenant, and I don't want to mess them around - my plan is to keep them informed of the process (should I go ahead) and they will be given as much notice as possible. However, if I tell them I am looking to sell, can they up sticks and leave? Do I have any recourse if they do? 

Any ideas (or pointers to helpful links) would be much appreciated!

K


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## twofor1 (1 Mar 2012)

Kine said:


> However, if I tell them I am looking to sell, can they up sticks and leave? Do I have any recourse if they do?


 

Seems a bit unreasonable to me, you want these good tenants to leave but only when it suits you.

If I was selling I would be very happy if my tenants agreed to leave, have a look at what Threshold say on this issue;

http://www.threshold.ie/page.asp?menu=70&page=246


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## Bronte (1 Mar 2012)

Kine you are expecting too much of the tenant.  In any case it is easier to sell with a property empty.  

You can bribe the tenant to stay while you put it up for sale, a reduction in rent could work.


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## oldnick (1 Mar 2012)

I'm unsure whether it is always easier to sell with no tenant. At present many properties are being bought by investors who want to take over a place in turnkey condition including a good tenant. 
Indeed, if its an apartment then there's a big chance it'll be bought by an investor.
Depends on the property I suppose


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## facetious (1 Mar 2012)

Kine said:


> Hi all,
> 
> I may be in the position where I have to sell my property over the next few months. My only concern is that I have a tenant currently in (started a 1 year lease last November) and I'm not 100% sure what I can or can't do? Up to now they have been a good tenant, and I don't want to mess them around - my plan is to keep them informed of the process (should I go ahead) and they will be given as much notice as possible. However, if I tell them I am looking to sell, can they up sticks and leave? Do I have any recourse if they do?
> 
> ...



If your tenants have a Fixed Term lease, you cannot remove/evict them just because you want to/have to sell the property.  A fixed term means just that, although Irish law gives the tenant the option to vacate without penalty by assigning the lease - landlords have no get out option.

Also, they do not have to facilitate you with viewings while they are in occupancy.

Furthermore, if they have been in the property for more than six months, they have acquired Part 4 rights, which allows them to remain in the property for up to 4 years. At the end of the fixed term, with their Part 4 rights, they can choose which type of lease suits them - another fixed term lease, a Part 4 lease or a periodic lease.

If they chose a Part 4 lease they can leave at any time without problem by giving written notice and the required notice period. As landlord, you can also give them notice on the grounds that you want to sell the property, by giving the required notice period.

If they chose another fixed term lease, you could have a problem in removing the tenants unless you have a break clause - but then they may not sign the lease. However, this may be to your advantage as no new lease signed means that there will be a Part 4 tenancy in existence.

By selling the property as with a tenant in situ, could save you hassle. However, you could always offer to "buy out" the lease by offering them an incentive (cash) to leave; but be careful not to harass the tenant in this respect or you could be liable to a hefty fine if a claim was brought to the PRTB.

Again, to get viewings, if the tenants won't allow it, which they are entitled to do, a cash incentive may be the way out - otherwise you could be up the creek without a paddle. But as they are good tenants, and basically a new landlord does not directly affect their lease they may be agreeable - if you manage to get anyone interested in the property - viewings may be few and far between due to the state of the housing market but that's a different matter.


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## RMCF (1 Mar 2012)

Was recently in the exact same situation, only difference being that the lease was up for renewal.

I let the tenant know that I wanted to sell if possible. The tenant liked the house so was obviously disappointed.

So offered a reduction in rent, as long as they agreed to a rolling 1 month contract, with the understanding that if a buyer was found then they would have maybe 6 or 8 weeks to find somewhere else.

All parties seem happy, so perhaps chat to them about a rent reduction.


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## Bronte (2 Mar 2012)

facetious said:


> If your tenants have a Fixed Term lease, you cannot remove/evict them just because you want to/have to sell the property. A fixed term means just that, although Irish law gives the tenant the option to vacate without penalty by assigning the lease - landlords have no get out option.
> 
> .


 
This is not true.  Landlords can end a tenancy if they are selling the property (and for other reasons).  Otherwise it would restrict property rights.  

People do not sell 'just' because they want to sell, it is a serious decision by the property owner.


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## Berni (2 Mar 2012)

Bronte said:


> This is not true.  Landlords can end a tenancy if they are selling the property (and for other reasons).  Otherwise it would restrict property rights.



That only applies to a Part 4 tenancy. A fixed term lease overrides those clauses for the landlord.
Their property rights are not affected, they can still sell, but it will be wth a sitting tenant whose tenancy the new owner will have to respect.


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## facetious (2 Mar 2012)

Bronte said:


> This is not true.  Landlords can end a tenancy if they are selling the property (and for other reasons).  Otherwise it would restrict property rights.
> 
> People do not sell 'just' because they want to sell, it is a serious decision by the property owner.



I beg to differ on this point.

A Fixed Term lease is a legal contract is for a specified period of time. If this were not so, it would no longer be a fixed term lease. Having a clause in a lease where it would benefit the landlord and not the tenant would, IMHO, be contrary to the provisions of the Residential Tenancies Act 2004. Basically a fixed term lease cannot be broken, save in the following circumstances:

1. Breach of obligations or of the terms and conditions of the lease by either landlord or tenant.
2. A Tenant may get out of a fixed term lease by (with the permission of the landlord) assigning his part of the lease to another person acceptable to the landlord. If the landlord refuses to accept an assignment, the tenant may leave after the statuary notice period and a written notice of termination and retain his deposit.
3. Tenants may be served with a Notice of Termination for anti-social behaviour - 28 days for non serious behaviour and 7 days for serious offences.
4. By using a break clause in the lease - if there is a break clause.
5. By mutual agreement between landlord and tenant.
6. A landlord may "buy out" the lease by offering the tenant a cash incentive to vacate the property. The tenant can accept or reject any offer.
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> Landlords can end a tenancy if they are selling the property (and for  other reasons).


This applies only when a Part 4 tenancy is in existence - it does not apply to a fixed term lease. Under a Part 4 tenancy, a landlord may terminate a tenancy on under 7 grounds of which one is if they intend to sell the property in the next three months.Further more, if a landlord did remove his tenants in such circumstances, he would be liable for illegal eviction with a fine of up to 20,000 euros.



> Otherwise it would restrict property rights.


If the landlord intends to sell his property, he should not enter into a fixed term contract - he can use a Part 4 or a Periodic lease both of which allow him to terminate the lease. 

Of course, if he has a fixed term lease, he can also sell the property with the tenant in situ.


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