Like you, every property is unique, so we’ll just need a few details before we can make you an offer.
Can I sell an inherited house with sitting tenants?
Yes. You'll need to advertise that there are tenants in the house when putting it up for sale though.
Inheriting a property can raise many questions, especially if the house was being rented out by the deceased owner and the tenants are still residing. So what do you need to know about inheriting a rented property?
When you inherit a property, you may have to pay inheritance tax; that’s a given depending on the estate. But when you inherit a property that has tenants in, there are other taxes that you should be aware that you may have to pay. If you choose to keep the property and take over as the landlord, you might need to pay income tax. If you decide to sell the property, there could be a capital gains tax if the value has increased over time. Often, the tax implications can be a deciding factor in keeping the property or selling it on, but it is important to know that there can be fees incurred with either option. You also need to look into what happens if you inherit a house with a mortgage, as this could also have an impact on what you decide to do.
I’m thinking of keeping the property and renting it
The first thing you need to do if you want to rent your new property is to confirm where things stand with the current tenant. It may be outlined in the will if they have a right to stay, but if not you will need to speak to them and come to an agreement between yourselves. From this, you’ll be able to confirm if they’re moving out of the property or if they’re staying, and under what conditions.
What are the legal responsibilities of a Landlord?
As a Landlord, you will need to follow
The Disability Discrimination Order, 2006
The Sex Discrimination Order, 1976
The Race Relations Order, 1997.
If you’re unsure of any of these, you can get legal advice to make sure you’re compliant.
It’s also important to know what your responsibilities are in regards to maintaining the property-
Any repairs to the structure and the exterior of the property
Any repairs to the interior of the property, including heating and hot water
Confirming the fire safety of any furnishings and furniture
Making sure that the property is fit for habitation
As a landlord, you’re entitled to inspect the property and to enter it to carry out any repairs, but you legally have to give the tenant 24 hours’ notice. If you don’t, they can refuse you entry to the property.
You will need to give the tenant a new statement of terms within 28 days of your agreement with them, and any deposit needs to be kept safe.
I might sell the property on
If you’re not keen on the idea of keeping the property to rent, you can sell the property with the tenants still living there. You can list the property as occupied, and the tenant will pay their rent to the new landlord once the property has been sold. You can also sell after possession if you’d prefer, by terminating the tenancy and proceeding to sell once the tenant has left.
Is it harder to sell with a tenant living in the property?
You should be aware that there is a smaller market for selling an occupied property. It can take longer because of this because there are fewer buyers looking for this sort of investment, however, it is massively down to chance; you never know who might be searching the market!
It can be more difficult to organise viewings, as you’ll need to find times that are convenient for yourself, your potential buyer, and your current tenant. It can also be more awkward if your tenant isn’t particularly happy about your decision to sell, as they can purposely make it hard to arrange viewings.
It can, however, cost you less to sell. If it takes 6 months to find a buyer, you will still be receiving your tenant’s monthly rent. It also can be an incentive for your potential buyers to pay more to buy the property; with a tenant in the property they are guaranteed an income from the first month of owning, so they may be happy to pay more upfront for a long-term gain.
How much of an impact will the tenant have on selling?
Usually, new landlord won’t buy an occupied property, so there is a very good chance that your potential buyer has already had more than one experience with nightmare tenants. If your current tenant is in arrears or has had any complaints from neighbours such as noise complaints, it will make the property harder to sell. Any potential buyer will see this as a red flag.
However, having a good tenant in the property who has consistently paid rent in full and on time will be a great selling point and encourage buyers interested in the property.
When you inherited you may have been wondering, how long does probate take? We’ve outlined the process so you can know everything you need to, easing your mind in a stressful time.
If you’re struggling to sell your property and are looking for another option, get your free quote today.