Selling a rented property: what are the rules?

Any letting landlord may wish to sell their property, for various reasons: investing elsewhere or retrieving cash most often. The impact for the tenant may vary, depending on whether the landlord wishes to sell their property “bare”, that is to say unoccupied, or on the contrary sell it while let. Let us explore the various possibilities, in order to determine the options for the tenant, who may also wish to verify whether their landlord is acting lawfully.

Another investor purchases the property

The first case – the simplest – involves selling the property, occupied, to a new letting landlord. The impact on the tenant is then nil, since they can continue to occupy the property under the same conditions, with the lease continuing. This type of sale most often occurs during the course of a lease, at the initiative of a landlord keen to dispose of the property – as the sale is generally granted at a price lower than that of an empty property.

The tenant, if they are informed of the sale, may propose to purchase their property, but they do not have any right of first refusal. The sole obligation consists of the new landlord sending their contact details to the tenant.

All obligations are transferred to the new owner: they must notably return the deposit when the tenant leaves. The guarantor, if there is one, is in no way released from their commitment.

The landlord wishes to sell the property empty

Another scenario: before selling, the landlord wishes for the tenant to vacate the premises. Several rules then apply.

Serving notice to sell

The landlord must give notice to the tenant, in order to free the property from any occupation at the end of the lease (or of one of the lease periods, according to the 3-6-9 year principle). Please note, the rules for notice to sell are precise and the landlord must observe them to the letter, at the risk of facing a criminal fine and payment of damages to the tenant.

Regarding deadlines, notice must imperatively be given at least 6 months before the end of the lease for an empty property, or 3 months if the property is furnished, on pain of nullity. The letter (recommended or via bailiff’s act) must be addressed to all signatories of the lease and the reason for notice (to sell in this case) must be clearly indicated.

This sending constitutes an offer of sale to the tenant(s): the letter will also mention the price and conditions of sale, the description of the property and any annexes, as well as the text of the first 5 paragraphs of II of article 15 of the law of 6 July 1989.

The right of pre-emption

The notice to sell thus gives the tenant the possibility of purchasing the property, being in prime position. This right applies only to empty properties, therefore excluding furnished lets, and subject to the landlord not wishing to sell to a family member up to the third degree. This includes parents, grandparents and great-grandparents for ascendants, and children, grandchildren and great-grandchildren for descendants. The calculation also applies collaterally, taking into account brothers and sisters of course, but also uncles and aunts, nephews and nieces.

Following the established rule, the tenant may exercise their right of pre-emption, without the landlord being able to oppose this, during the first two months after receipt of the registered letter signifying the notice. They must then inform the landlord of their intention to purchase by registered letter also, indicating whether a mortgage loan will be necessary to complete the acquisition. A deadline of two months is then granted to sign the deed of sale, or four months if a loan must be taken out.

The offer is however deemed refused, if the tenant:

• refuses to buy back the property,
• sends no response to the landlord during the first two months of notice,
• proposes a price lower than that set by the landlord, and the landlord refuses.

Please note: if the tenant does not purchase due to lack of means and later discovers that the landlord is selling or has sold at a price lower than the conditions proposed to them, they regain priority and may even be entitled to demand the nullity of a sale completed!

When to leave the property?

If no agreement is reached, the tenant must therefore leave the premises. If they cannot do so beyond the last day of the lease, they are however free to do so before, and without compensation as the termination of the the lease agreement is at the landlord’s initiative.

The handing over of keys to the landlord and the inventory of fixtures can be carried out when the tenant wishes, and they will only be liable for rent and charges calculated pro rata to their actual occupation.

The right of visit

In all cases, the tenant is bound to grant their landlord a right of visit, and this even if the deadline for the right of pre-emption has not elapsed. The tenant’s privacy must however be preserved and they must be given advance notice of visits, which cannot otherwise take place on Sundays and public holidays. The best approach remains to reach a mutual agreement, on time slots for visits.

It should also be noted that the landlord cannot compel the tenant to authorise a visit in their absence.

The special case of tenants over 65 years old

The law provides special protection for tenants aged over 65. If their income is below the ceiling in force for the allocation of social housing, notice cannot be served to them. The rule also applies to a tenant aged under 65 but who has a person exceeding this threshold in their care on the date of the lease expiry.

To avoid automatic renewal of the lease, the landlord may however propose to the elderly tenant a relocation solution. This must then relate to a property corresponding to the tenant’s needs, their financial possibilities, and located nearby (same commune or arrondissement, or neighbouring commune/arrondissement).

It is not always straightforward for a landlord, to inform their tenant that they wish to see them leave. Conversely, a tenant may take badly the announcement of the resale of their property. Observing these few rules and a courteous approach for each party, will favour a smooth progression of the sale.