Propertymark is advising agents working with landlords selling with sitting tenants to keep ‘watertight paperwork’ ahead of the Renters Rights Bill becoming law.

The trade body has issued a statement saying that – same as now – it will be possible to sell a property with its current tenants to a new landlord or investor once the Bill becomes law.

However, rules surrounding repossession of the property will of course change, for both new and existing tenancies, meaning that the new owners will have to adhere to the new standards for serving notice if they later decide to repossess the property. 

Propertymark warns that potential investors may view the changes as reducing the flexibility and profitability of buy-to-let, which could lead to lower demand and put downward pressure on prices.

The trade body adds: “Sales agents can showcase their value by providing clear guidance and utilising local expertise and market knowledge to market properties effectively. Propertymark agents are well-equipped to support investors in managing tenant relationships and compliance issues, and investors can offload much of the regulatory burden by choosing to work with a professional agent.”

Once the Bill becomes law, tenants will be entitled to a 12-month protected period at the beginning of a tenancy, during which landlords cannot evict them to move in or sell the property.

If ownership changes during this time, the new landlord must honour the rest of the maining initial 12-month period before they can serve notice to move into the property themselves or resell. Once the 12 months have ended, four months’ notice can be served on these grounds.

Propertymark advises that buy to let investors must also be made aware that the new periodic tenancies will give tenants the right to end the tenancy at any time by giving two months’ notice.  

The trade body continues: “The marketing of a property should let potential buyers know that the tenants will remain, and once the sale is completed, they will start making their rental payments to the new buyer.

“Buy-to-let listings are likely to attract a smaller pool of potential buyers, although tenants in-situ can be an attractive selling point as the property offers a guaranteed rental income immediately. It also means that the property won’t be empty during the conveyancing process, protecting the rental yield from a lengthy void period. “