If you’re a landlord in Scotland who is considering selling your tenanted property, you may be feeling some confusion regarding the upcoming change in legislation.

I’m still coming across landlords who don’t realise that it’s possible to sell a tenanted property with tenants living there, let alone any legislation that might complicate a sale with vacant possession. So, it’s important that they have all the facts. 

You may be one of the many concerned landlords telling me how the new changes will affect them. As an experienced property professional who has seen many legislation changes over the years, I get it.

So, let’s take a look at what options you have when selling your tenanted property in 2022. How can you make the process smooth, and what things should you keep in mind? 

Well, let’s get started! But first…

A little bit of background 

During the covid pandemic times, the Coronavirus (Recovery and Reform) (Scotland) bill ensured that all grounds of tenant eviction were temporarily made discretionary. This was to ensure tenant welfare in unprecedented times. 

On 28th June 2022 the Scottish Government voted to make these changes permanent from 1st October 2022. This means that where evictions are concerned, the discretionary power of a tribunal that was previously temporary, is now permanent. 

“Mandatory grounds for reclaiming a property, such as wanting to sell the property or wanting to live in the house yourself, will become discretionary, meaning that a tribunal could agree that your reasons for reclaiming the property are valid but they do not necessarily need to grant an eviction order.” (Landlord Today) 

What does this mean for landlords? In a nutshell, selling a property is no longer a mandatory ground to get the property back. A first-tier tribunal can use its discretionary power to ensure there are no automatic evictions on mandatory grounds. 

Selling your tenanted property in 2022

What if you don’t need to end the tenancy and evict tenants to sell your property? It may still be news to some, but it’s actually a more common way of selling property than you might think – especially since most portfolio sales are actually tenanted. 

We have written a lot about tenanted property sales on our Portolio blog. Property investors who understand the idea, are attracted by an instant rental income on their investment. 

Approaching a tribunal should be a last resort for a professional landlord. Time and money are precious resources, both for you and your tenants. Ideally, unless you have other plans for your property, a buy-to-let offer is your best friend. 

We have an entire section devoted to selling tenanted property and you can get in-depth information in our free landlord’s guide on selling tenanted property.

Good communication with your tenants is key

Throughout our blogs we’ve always emphasised the importance of maintaining a great relationship with your tenants. Every tenancy agreement has the eviction clause that both parties should be aware of and agree upon. 

This pre-existing dialogue between you and your tenant can address many potential problems, so when you are getting ready to sell your property, it’s always best to reach out to your tenant as soon as possible.

Keep in mind the pre-action requirements and stick to the legal formality of your tenancy contract. Act by the book, explain in simple terms the notice period and relevant clauses to your tenants.

If you intend to sell your buy-to-let, it makes sense to be considerate and explain this to your tenants. Going the extra mile to be clear and transparent in the period leading up to the change of ownership will be appreciated. 

For more advice on how to communicate with tenants when selling your tenanted property in 2022, check out our blog here.

Preparing your case for tribunal

In the event of having to reach out to the tribunal as a landlord, it’s important that you are prepared with all paperwork up-to-date. A tribunal will look for valid and pressing reasons for evictions.  

Many landlords are concerned that this new legislation is heavily weighted against the tenants, but a forced eviction is a serious matter that must be handled with utmost responsibility. 

As a landlord it is important that you present valid reasons for repossession of your property. The Scottish Association of Landlords (SAL) is one of many excellent resources on this subject and a great starting point for any landlord in this situation.

Advice from the property pros

I would suggest any landlord looking to sell property with tenants to educate themselves properly. The best way is to always work mutually with your tenants, follow the tenancy clauses, and discuss an urgent or emergency sale, if that’s the case, with your tenants. 

Each case is of course unique and can be complex, but if you follow all the legal terms of the tenancy contract, and have in the past aligned with them, it makes for a valid case should you have to take your case to a first-tier tribunal. 

The most important point to remember is that your decision to sell your tenanted property no longer means that it is a certainty that you can evict your tenant at the end of the notice period. 

Most tenants, it’s important to add, will appreciate the notice period and use it to find other accommodation when the time comes, meaning there will be no need for a tribunal. 

In summary…

As we move closer to October 2022 when the legislation kicks in, we will see a lot of discussion and potential updates from the government. Keep your eyes and ears open. 

It’s definitely a fact that the property landscape in Scotland is changing rapidly. As a professional in the sector, I hope for the best but acknowledge that it’s always best to be prepared. 

For any advice or help in selling your tenanted property in 2022, please feel free to reach out to us for a no-strings chat. We’re always happy to lend an ear. 

Written by Ross MacDonald, Director of Sales & Cofounder of Portolio

Get in touch on 07388 361 564 or email to [email protected]