An apartment can be sold even when a tenant is living in it. An existing tenancy does not automatically mean that the apartment must be vacant before the sale.
However, the tenancy affects the sales strategy, the pool of potential buyers and, in some cases, the speed of the transaction.
In some situations, an apartment with a reliable tenant may even be more attractive to an investor. In others, an existing tenancy can make a standard sale more complicated.
Can you sell an apartment with a tenant?
Yes.
Selling the apartment and the existing tenancy are two separate matters. Before starting the sale, however, it is important to understand exactly what type of lease is in place and what obligations it creates.
It is worth checking:
- how long the lease remains in force;
- the conditions for terminating the lease;
- the amount of rent;
- whether the tenant has any arrears;
- what deposit has been agreed;
- whether there have been any problems with the use of the apartment.
Before the transaction, a potential buyer should know what tenancy arrangements come with the apartment.
Does the tenant have to move out before the apartment is sold?
Not necessarily.
If the buyer is an investor, an existing reliable tenant may actually be an advantage. The buyer acquires a property that is already generating rental income.
If the buyer wants to live in the apartment, the important question becomes when and under what conditions the property can be vacated.
The existing tenancy therefore directly affects which type of buyer the apartment should be marketed to.
How can you sell an apartment if the tenant does not want to move out?
In this situation, the issue should not be hidden from the buyer, and the property should not be marketed before the terms of the existing lease have been checked.
The legal position of the tenancy should first be clarified, after which it is possible to decide which sales method is realistic.
If the apartment cannot be vacated in the near future, it may make sense to target the offer primarily at investors or buyers for whom an existing tenant is not an obstacle.
Such an apartment can still be sold — the right buyer may simply be different.
How should apartment viewings be arranged when a tenant is living there?
Viewings of a tenanted apartment should be planned and agreed in advance.
Repeated unexpected visits can create conflict and make the sales process more difficult for both the owner and the tenant.
In practice, it is sensible to agree on specific times when the apartment may be shown to potential buyers and how much advance notice will be given.
If arranging viewings is very difficult, this also affects which sales method is most suitable.
Should a tenanted apartment be sold on the open market, to an investor or through a direct property purchase?
This depends primarily on the owner's objectives, the lease agreement and how quickly the transaction needs to be completed.
Open-market sale
This is suitable when there is no urgency and the existing tenancy does not prevent viewings or the transfer of the apartment to the buyer.
The objective is to find a buyer on the market at the best possible price.
Fast sale
If the owner wants to complete the transaction sooner, the sales strategy can be directed more actively towards investors and buyers for whom the existing tenant is not a problem.
This can reduce the time needed to find a suitable buyer.
Direct property purchase
If the owner needs a quick and simple solution, or the situation with the tenant makes a standard sale difficult, one option may be a direct property purchase.
With a direct property purchase, the apartment is assessed together with the existing tenancy and other circumstances, and the owner can decide whether the purchase offer is suitable.
Can an apartment with a problematic tenant be sold?
Even a problematic tenancy does not automatically mean that the property cannot be sold.
It is important to know what agreement is in force, whether there are arrears and what rights and obligations the parties have.
The more complicated the situation, the more important it is to choose the right sales strategy before publicly listing the apartment.
Sometimes it makes sense to resolve the tenancy before the sale. In other cases, it may be possible to sell the apartment together with the existing tenant.
Which solution is right for your situation?
- There is no single universal solution for selling an apartment with a tenant.
- If the objective is the highest possible market price, a standard open-market sale may be suitable.
- If the objective is to sell faster, a fast-sale strategy targeted at investors may be suitable.
If the objective is to complete the transaction as quickly as possible without a lengthy sales process, a direct property purchase may be suitable.
Vendor Kinnisvara helps owners in Tallinn and Harjumaa assess the situation of a tenanted apartment and compare different options before making a decision.
If you would like to sell an apartment with a tenant, send us the property address and the main details of the lease. We will review the situation and propose a realistic sales plan.
Article author
Advises owners considering an urgent property buyout in Tallinn and Harjumaa.
