Can I sell my property at auction to another landlord with an active tenant?

Selling a property at auction can come with several complications but one of the most daunting is when the property you’re selling has someone else living in it as a tenant. Is it even possible to sell at auction under those conditions? It certainly is, though it needs to be done carefully and sensitively.

At Mark Jenkinson we can help you navigate this potentially difficult sale to come out with a resolution that works for all parties. Here’s our guide to selling tenanted property at auction.

Firstly, before starting this process, you need to consider whether selling a property with an active tenant is the right move. It naturally comes with a smaller potential market than selling an empty property as only other landlords will be interested in buying it.

However, there can be advantages for landlords to sell - and buy - with a tenant in situ. For one thing, it means that the income flow before and after the auction can continue uninterrupted, while potential buyers know that they will be earning from the property straight away.

 Your legal obligations

While you may own the property you’re looking at sell at auction, you need to also understand what rights the tenant has. After all, it’s their current home that you’re trying to sell.

If you decide that you don’t want to sell with the tenant in residence, you would need to serve notice - typically an eight-week process - and sell the property with vacant possession. This could be because you want to appeal to potential owner-occupiers or because the property needs refurbishment.

As mentioned above, there are downsides to selling without a tenant living there, not least that you’ll stop earning income on the property and will start incurring costs for any mortgage or bills. So, to proceed with the sale, you need to do a few things first, starting with checking your tenancy agreement.

This will detail what your obligations are in this situation, including what notice you need to give the tenant that you are looking to sell at auction and how this could potentially impact them. They will have the right to continue living in the property until their lease expires, so selling to another landlord rather than a potential owner-occupier would be the best outcome for them.

How to sell a property with an active tenant

Even though your tenant will no longer be your responsibility once the sale has gone through at auction, it is still in your interests - and the right thing to do - to be open and honest in your communications about the process.

This is important for helping the auction go smoothly as you will need the tenant to cooperate with the auctioneer to allow potential buyers to access the property for viewings. These procedures need to be arranged sensitively to minimise disruption for the tenants.

Selling a property at auction with an active tenant can bring complications to the process but for landlords - both buying and selling - there are clear advantages. Our experienced team can help you navigate this process while keeping everyone happy and finding the right result for all concerned.