Should I remove my tenants before putting my property up for sale? This is a question that many property owners / landlords ask us when they’re considering to sell. You can certainly put your investment property up for sale with tenants in place. This will deter potential owner occupiers who will shy away from having to evict sitting tenants. However, a buy to let investor may be interested in acquiring an investment property that will generate rental income from the very first month with no need for him/her to find tenants. Having sitting tenants will also take the guesswork out of calculating the rental yield on offer. While each case is different, typically bringing a property to the market with vacant possession is the best option as you are opening up the property to buy to let and owner occupiers alike, thereby maximising the price likely to be achieved. If you do decide to remove the sitting tenants, there are a number of matters to consider, which are outlined below. A quick aside to note here is that if you have a good relationship with your tenants, they have agreed to "go peacefully" so to speak and have the property in good condition, there is no need to delay putting the property on the market until the day they move out. Selling a property, from going live on Daft / MyHome, to signing contracts can take literally several months. This can put quite a lot of strain on a vendor as they have to service a mortgage with no rent coming in. So, if possible, it is worth trying to sell the property in parallel with tenants serving out their notice periods so as to reduce the number of mortgage payments that have to be made while the property is empty and no rent is coming in. That being said, if the tenants are "digging in" and you feel they may look to frustrate the sale to protect their own interests, it is best to wait for them to leave before putting on the market. For example, if they have the property in a mess while viewings are being conducted, this will obviously not help the sales process.
How to Remove Tenants from My Property
The first thing to be aware of here is that this is a delicate situation and one that needs to be handled compassionately and fairly. Your tenants have made your property their home, sometimes for several years, and now you are asking them to leave. In the current rental market, finding alternative accommodation is not easy so tenants may resist your efforts. The RTB lists 6 scenarios in which a landlord is entitled to terminate a tenancy:
- The tenant has failed to comply with their obligations having first been notified, in writing, of the failure, and given an opportunity to remedy it.
- The landlord intends to sell the dwelling within 9 months of the termination date.
- The dwelling is no longer suited to the needs of the occupying household.
- The landlord requires the dwelling for own or family member occupation – this is not applicable to tenancies involving Approved Housing Bodies.
- Vacant possession is required for substantial refurbishment of the dwelling.
- The landlord intends to change the use of the dwelling.
While a landlord who wishes to sell his/her property is entitled to terminate a tenancy, there are however a number of things to keep in mind when embarking on this process.
Have You Registered the Tenancy with the RTB?
All residential tenancies have to be registered with the RTB. Not registering a tenancy can have potentially serious consequences. The below is from the RTB website:
Penalties for not registering a tenancy: What are the penalties for not registering a tenancy? A person who does not comply with their responsibility to register their tenancy/ tenancies faces a criminal conviction and a fine of up to €4000 and/ or 6 months imprisonment, if convicted. In addition to the Court imposed fines, the landlord will also have to pay the RTB’s legal costs which can be in the region of €2,500 plus VAT per case.The RTB does not wish to prosecute landlords. We will work with landlords to assist them in registering their tenancies if they contact us on receipt of the formal notification and in advance of any summons issuing. However, if a summons has issued then the case will go to Court.
If you have forgotten to register a tenancy with the RTB, the tenants may use this as leverage to delay and frustrate your efforts to remove them. Tenancies can be registered late by paying the usual registration fee of €90 plus a €90 late filing fee (€180 in total). By registering the tenancy and being fully compliant, a landlord can rely on the support of the RTB in his/her efforts to remove a tenant.
Revised Notice Period for Tenants from the RTB
The notice period that you are required to give to tenants varies depending on how long they have been your tenants at the property that you are selling. Note that Day 1 of the notice period starts the day after the notice of termination is issued. The RTB revised the periods of notice for tenants most recently on July 6th 2022 as below.
|Duration of Tenancy
|Less than 6 months
|Not less than 6 months but less than one year
|Not less than 1 year but less than 7 years
|Not less than 7 years but less than 8 years
|Not less than 8 years
Source: Residential Tenancies Board website
Issuing a Valid Notice of Termination to Tenants
In disputed cases brought to the RTB in 2016, 43% of notices were deemed to be invalid. Accordingly, it is worth taking the time to ensure that the notice you issue is valid as if a notice is deemed to be invalid, a new notice must be issued. Below is a template notice of termination for a landlord who wishes to sell a property. Note that this must also be accompanied by a statutory declaration of your intention to sell the property; this needs to be signed by the landlord in the presence of any one of the following: practicing solicitor, a notary public, a commissioner for oaths, peace commissioner. A template statutory declaration is below the template notice of termination. Both need to be furnished to the tenants in writing. In order for a notice of termination to be valid, it must furthermore:
- Be in writing (an email will not suffice).
- Be signed by the tenant or landlord or his or her authorised agent, as appropriate.
- Specify the date of service.
- State the grounds for termination (where the tenancy has lasted for more than 6 months or is a fixed term tenancy).
- Specify the termination date and also that the tenant has the whole of the 24 hours of this date to vacate possession.
- State that any issue as to the validity of the notice or the right of the landlord to serve it must be referred to the RTB within 28 days from the receipt of the notice.
- Be accompanied by a statement/statutory declaration where required.
NOTICE OF TERMINATION - Landlord intends to sell the dwellingNotice of Termination (Landlord intends to sell the dwelling) A tenancy, which is a Part 4 tenancy, may only be terminated by the landlord pursuant to Section 34 of the Residential Tenancies Act 2004 – 2019. Additional factors apply where the tenant is in occupation under the terms of a fixed term lease or tenancy agreement as this may only be terminated under certain conditions (see https://onestopshop.rtb.ie/beginning-a-tenancy/types-of-tenancies-and-agreements/fixed-term-tenancy/). The following are permitted grounds for the termination of a Part 4 tenancy:-
1. The tenant has failed to comply with their obligations having first been notified, in writing, of the failure, and given an opportunity to remedy it.
2. The dwelling is no longer suited to the needs of the occupying household.
3. The landlord intends to sell the dwelling within 9 months of the termination date.
• Required additional documentation: 1) Statutory declaration.
4. The landlord requires the dwelling for own or family member occupation – this is not applicable to tenancies involving Approved Housing Bodies. • Required additional documentation: 1) Statutory declaration.
5. Vacant possession is required for substantial refurbishment of the dwelling. • Required additional documentation: 1) Health & Safety Certificate in writing of a registered professional (within the meaning of the Building Control Act 2007), 2) Copy of planning permission (If required), and 3) Statement specifying the nature of the intended works, duration of works etc.
6. The landlord intends to change the use of the dwelling. • Required additional documentation: 1) Copy of planning permission (If required), and 2) Statement specifying the nature of the intended works, duration of works etc.
Landlord intends to sell the dwelling
A Landlord is entitled to terminate a Part 4 tenancy where they intend, within 9 months months after the termination date, to enter into a binding contract for the transfer to another for full consideration of his or her interest in the dwelling or property containing the dwelling. The notice of termination must be accompanied by a statutory declaration which includes a declaration that:-
(a) The landlord intends to enter into an enforceable agreement to transfer to another, for full consideration, the whole of his or her interest in the dwelling or the property containing the dwelling, and
(b) The landlord is required to offer to the tenant the option of a tenancy if I do not enter into an enforceable agreement to transfer to another, for full consideration, the whole of my interest in the dwelling or the property containing the dwelling, within a period of 9 months from the expiry of the notice period in the notice of termination or if a dispute in relation to the validity of the notice is referred to the Residential Tenancies Board, the final determination of the dispute and the tenancy to which the notice relates had not otherwise been validly terminated by the grounds specified in the Table to Section 34 of the Residential Tenancies Act 2004-2019.
(c) Where the landlord intends to sell 10 or more dwellings (the Tyrellstown amendment), a declaration that the restriction on the sale of 10 or more dwellings (see section 35A) does not apply to the said notice as the price to be obtained by selling at market value the dwelling that is subject to a Part 4 tenancy is more than 20 per cent below the market value that could be obtained for the dwelling with vacant possession, and that the application of the restriction on such a sale would, having regard to all the circumstances of the case be unduly onerous on or would cause undue hardship on the landlord.
In order to allow the tenants an opportunity to fix any issues you may have with regard to the property i.e. cleaning, repairs and replacements in excess of normal wear and tear, it is recommended that you carry out an inspection a few days / weeks before the tenants are due to vacate and on the day they vacate the dwelling.
NOTICE OF TERMINATION - Landlord Intends to Sell the Dwelling
The tenancy of the dwelling at (Address)________________________________________________________________________________ will terminate
You must vacate and give up possession of the dwelling on or before the termination date.
The reason for the termination of the tenancy is due to the fact that the landlord intends, within 9 months of the termination date, to enter into an enforceable agreement for the transfer to another, for full consideration, of the whole of his or her interest in the dwelling or the property containing the dwelling.
The landlord will offer you the opportunity to re-occupy the dwelling if:
(a) The landlord does not enter into an enforceable agreement stated above within the period of 9 months from expiry of the period of notice given by this notice of termination or, if a dispute in relation to the validity of the notice is referred to the Board under Part 6 for resolution, the final determination of the dispute;
(b) The tenancy to which this notice relates has not otherwise been validly terminated by reason of a ground specified in paragraph 1, 2 or 6 of the Table to section 34 of the Residential Tenancies Acts 2004 to 2019;
(c) You provide your contact details to the landlord, in writing, within 28 days from the service of this notice or the final determination of a dispute referred to the Board relating to the validity of this notice and you notify the landlord as soon as possible of any change in your contact details. Please note that the requirement to provide contact details to the landlord applies irrespective of whether the landlord already holds your contact details.
You have the whole of the 24 hours of the termination date to vacate and give up possession of the above dwelling.
Any issue as to the validity of this notice or the right of the landlord to serve it, must be referred to the Residential Tenancies Board under Part 6 of the Residential Tenancies Acts 2004 to 2019 within 28 days from the date of receipt of it.
This notice is served on date__________________________.
Print Landlord Name:_______________________________________________________
Please note - In order to ensure that there is no delay on returning the deposit, I would suggest carrying out inspections on (INSERT DATE)_______________________ and/or (INSERT DATE)___________________ at (INSERT TIME)________________________________. Please let me know which date/time is convenient for you.
In respect of a Notice of Termination, for counting purposes Day 1 of the notice period begins on the day immediately following the date of service of the notice. The RTB recommend that you give additional days when calculating the required notice period to ensure sufficient notice is provided.
Statutory DeclarationI, (landlord name)_____________________________________________________, do solemnly and sincerely declare that I intend, within a period of nine months after the termination date, to enter into an enforceable agreement to transfer to another, for full consideration, the whole of my interest in the dwelling or the property containing the dwelling.
Note - Where the purported sale is intended to be part of the sale of 10 or more units as defined under section 35A of the Residential Tenancies Acts 2004 – 2019, and the tenancy concerned is a Part 4 tenancy, the Statutory Declaration is required to declare whether or not Section 35A(3)(a) applies. Where it applies, the declaration should reflect the wording under section 35(8)(b) of the Residential Tenancies Acts 2004 – 2019.
I understand that I am required to offer to the tenant the option of a tenancy if I do not enter into an enforceable agreement to transfer to another, for full consideration, the whole of my interest in the dwelling or the property containing the dwelling, within a period of nine months from the expiry of the notice period in the notice of termination or if a dispute in relation to the validity of the notice is referred to the Residential Tenancies Board, the final determination of the dispute and the tenancy to which the notice relates had not otherwise been validly terminated by the grounds specified in the Table to Section 34 of the Residential Tenancies Act 2004-2019.
The opportunity to occupy requires the tenant to provide contact details to the landlord within 28 days from the service of the Notice of Termination or the final determination of a dispute referred to the Board as regards the validity of the notice, and the tenant notifies the landlord as soon as possible should the tenants contact details change.
I make this solemn declaration conscientiously believing the same to be true and by virtue of the Statutory Declarations Act 1938.
[Declarant to Sign Here]_____________________________________________________________________
Declared before me ______________________________________________________________________ a [practising solicitor] [notary public] [commissioner for oaths] [peace commissioner] [person authorised by [insert authorising statutory provision]______________________________________________________ to take and receive statutory declarations by [Insert Name of Declarant]_____________________________________________ Who is personally known to me / who has been identified to me by ________________________________________________________ who is personally known to me and who has certified to me his/her personal knowledge of the declarant. Or
The identity of the declarant has been established by me by reference to a [Insert Identifying document*]_____________________________ containing a photograph of the declarant. This __________________________ day of ____________________________. 20_________ at ____________________________ [insert place of signature]
____________________________ [Signature of Witness]
*Approved Identifying Documents to be provided to Witness of Statutory Declaration
1. Passport issued by the authorities of an issuing State that is recognised by the Irish Government [passport number, date of issue and issuing State must be inserted]
2. National Identity Card issued by the authorities of an issuing State which is an EU Member State, the Swiss Confederation or a Contracting Party to the EEA Agreement [national identity card number, date of issue and issuing State must be inserted]
3. Aliens Passport issued by the authorities of an issuing State that is recognised by the Irish Government [passport number, date of issue and issuing State must be inserted]
4. Refugee Travel document issued by the Minister for Justice, Equality and Law Reform [document number and date of issue must be inserted]
5. Travel document (other than a refugee travel document) issued by the Minister for Justice, Equality and Law Reform [document number and date of issue must be inserted]
Filing Your Notice of Termination Return Form
The RTB furthermore requires landlords to submit a "Notice of Termination Return Form" to them within 28 days of the expiration of the tenancy termination date. This form can be found here. The form along with the copies of the actual notice of termination and statutory declaration can be emailed to: Registrations@rtb.ie or posted to:
Residential Tenancies Board,
PO Box 47,
Clonakilty, Co. Cork,
Is Your Rent Below Market Value?
Before the introduction of Rent Pressure Zones, landlords often accepted rents that were below market levels. This was common among non professional, so-called “accidental landlords”, who weren’t comfortable increasing their tenants’ rent, particularly if the tenant was a good, trouble-free one. However, with the introduction of RPZ’s this rent can now only be increased in line with inflation annually i.e. the sub market level rent is locked in so to speak. This applies to the property and not to the individual landlord i.e. an investor who buys a property in an RPZ will be subject to the inflation indexed annual rent rise cap.
So by undercharging rent, the value of the property can be substantially reduced from an investor's perspective. Rental yields vary nationwide and by property type but a typical investor will look, at the time of writing, for approximately a 6-8% rental yield. Another way of saying this is that a property is worth approximately 14.2 times its annual rental income (assuming 7% yield). Let’s suppose that a landlord was charging €300/month (€3600 per annum) less than what would have been achievable, this will reduce the price that an investor would be willing to pay by approximately €51,428. In such an instance, an owner occupier might be a more likely buyer as they will be unconcerned with the rent that was being charged whereas a buy to let investor will only pay a multiple of the rent that was being achieved as they will be tied to that moving forward.
Selling a property with sitting tenants can be a stressful exercise with a lot to consider. If you are considering selling your property and need some advice, please contact us and we will be happy to help.
While we take great care to keep this document up to date, there are frequent legislative and regulatory changes to this sector; this post is meant as a general guide only and should not be taken as formal advice. Before making any decision, make sure to take professional advice.