The Business Legal Services Blog

Tenancy agreements: What if I sell the property once signed?

I advertised my property for let and a potential tenant was found. Unfortunately, my personal circumstances changed and I had to sell the house. Can the tenant make a claim against me?

It is always prudent to ensure a rental property is vacant and fit for human habitation prior to advertising it and certainly before signing a tenancy.

This might sound like I’m stating the obvious, however, the situation does arise, for example, when a landlord is buying a new build house or significant repairs are required. To comply with recent changes in legislation, any building works should be fully completed before entering into a rental agreement, as any delays are likely to affect the start date.

Similarly, if there are existing tenants in your property, it is not advisable to sign another agreement until they have vacated, just in case they don’t leave.

The key factor determining if your tenant has a claim against you is whether a tenancy agreement was actually signed and at what stage you changed your mind in relation to letting out the property.

If your tenant didn’t sign a lease, they may have a claim for lost removal expenses, etc, as they relied on the contract taking place (to their detriment), but they won’t be able to demand you pay any subsequent difference in rent for a new property. A claim for damages will also depend on specific facts and what was said or done by both parties leading up to your change of mind.

If a tenancy agreement was signed, then it is legally binding and should you break its terms, you will be liable for any reasonable financial losses incurred by the tenant. You will also be responsible for the difference in their rent, if the tenant is unable to find a similar property at the same price.

So, the moral of this story is, don’t rush into signing a tenancy agreement. You could find yourself significantly out of pocket if the tenant is, through no fault of their own, unable to rent your property by the date agreed.

If you would like to discuss letting out a property or selling a house with sitting tenants, don’t hesitate to contact me by calling (0114) 218 4000 or email anna.pettinger@tayloremmet.co.uk

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