Certificates Needed When a London Landlord Sells a Tenanted Property
Selling a tenanted London property involves a different set of obligations and practical considerations compared to selling a vacant property. Landlords disposing of a tenanted investment property in London need to understand what certificates must be in place at the time of sale, what obligations transfer to the buyer, and how the transaction affects the tenancy.
What Certificates Must Be Current When a Tenanted London Property Is Sold?
A London landlord who sells a tenanted property is selling with an existing tenancy in place. The new owner steps into the shoes of the outgoing landlord and assumes all landlord obligations from the date of completion. This means that the buyer will need the current Gas Safety Record and EICR to be in date at the point of completion, as they will need these documents to evidence compliance with their landlord obligations from day one of ownership.
A Gas Safety Record that is close to its annual renewal date at the time of a property sale may need to be renewed before completion, as the buyer will otherwise face an imminent Gas Safety Record renewal as one of their first obligations as a new landlord. Most London solicitors acting for buyers of tenanted investment properties will request confirmation that the Gas Safety Record is current and will have at least three months of validity remaining at completion. An EICR for a rented property is currently valid for five years or until the next inspection and test date specified in the report, whichever is sooner.
Transferring Certificates and Documentation to the Buyer
On completion of the sale of a tenanted London property, the seller landlord should provide the buyer with a comprehensive set of documentation relating to the tenancy and the property compliance. This should include the current Gas Safety Record for each gas appliance in the property, the current EICR, any Energy Performance Certificate, the tenancy agreement and any renewal documents, the deposit protection certificate and prescribed information, any inventory and check-in report, the PAT testing log if applicable, and any recent boiler service records or maintenance history.
The buyer solicitor will include a request for these documents in the standard enquiries raised before exchange of contracts, and the seller solicitor should ensure that the seller assembles the complete documentation pack well in advance of exchange. Missing documentation is a common cause of delay in the exchange of tenanted investment property sales in London, as the buyer solicitor will not be in a position to confirm that all compliance obligations are satisfied until they have received and reviewed the full compliance documentation.
What Happens if the Gas Safety Record Has Lapsed?
If a Gas Safety Record has lapsed at the time of a tenanted property sale in London, the seller landlord is already in breach of the Gas Safety Regulations, and this breach will be disclosed to the buyer through the property information forms. A lapsed Gas Safety Record may cause a buyer to seek a price reduction, to request that the seller arranges a new gas safety check before completion, or in some cases to withdraw from the transaction until the breach is remedied. The seller should instruct a Gas Safe registered engineer to carry out a new gas safety check and obtain a fresh record as soon as the lapse is identified, rather than waiting for the buyer to raise the point.
Where a Gas Safety Record has lapsed, the seller should also consider whether there is any liability exposure under the Housing Act 2004 or the Deregulation Act 2015, both of which restrict a landlord ability to serve a valid Section 21 notice where prescribed pre-tenancy documents, including the Gas Safety Record, were not properly served on the tenant. This liability does not transfer automatically to the buyer, but a buyer aware of the breach may seek a warranty or indemnity from the seller in the sale contract.
PAT Testing for Landlords Selling Furnished Properties
London landlords who let a property with electrical appliances provided as part of the furnished letting must ensure that those appliances are safe under the Electrical Equipment (Safety) Regulations 2016. While there is no mandatory requirement for Portable Appliance Testing in residential lettings, maintaining a PAT testing log for furnished appliances is good practice and provides evidence that the landlord took reasonable steps to ensure appliance safety. A buyer purchasing a furnished tenanted property should expect to receive the PAT testing records alongside other compliance documentation.
Prestige Engineers carry out gas safety checks, EICR inspections, and PAT testing for London landlords preparing tenanted properties for sale, providing certificates and records that satisfy buyer and mortgage lender requirements. We can attend the property at short notice to renew lapsed certificates before exchange of contracts.