Monday, March 8, 2010

Selling a tenanted property

Selling a French property with a tenant in place is not quite as straightforward as offering you house or apartment with vacant possession on completion.

There are few circumstances in which you can ask your tenant(s) to leave, for example unless you require the property for your own use or for a close member of your family, or if you need to undertake urgent building works. Tenants occupying your property as their main or principal home or who are of advanced years have additional protections under French law.

If you decide to sell, you must offer your tenant(s) first refusal to buy the property, at market value, and giving at least six months notice in advance. Tenants are allowed a period of reflexion, as well as additional time to secure a loan or mortgage if required.

If you are selling a property with tenants in place (and they do not wish to buy), then you need to agree with them reasonable times during which prospective buyers, agents etc can visit the premises. Evenings, weekends and holidays may be excluded, and tenants may insist that visits are by appointment and only while they are present in person.

Failure to reach an agreement can result in tenants becoming obstructive and making visits difficult, sometimes to the extent that agents aware of the difficulties of viewing the property may refuse to take it onto their books, or are geneally relucant to offer it to prospective purchasers.

However, buyers looking for a longish term investment with a secure income, should not be discouraged. Studios and smaller apartments generally have a higher occupancy turnover (and suffer more wear and tear) than, say, larger three and four bedroom properties occupied by families, who are seeking long term stability.

Prospective purchasers should take advice about the potential rental markets - short, long and medium term; seasonal etc - in the locality where they are thinking of buying property.