When selling an FHL. Any tips? No replies from anyone yet!

[Wonkeye]

I posted this on Buying/selling your home, under the heading "Correct selling procedure. No, not us. Just some thoughts." However, it's either been missed, or else nobody wants to think about that step yet! I'm repeating it in its entirety below, but want to stress that in our case it's not imminent (to avoid getting comments like "Have you tried xx or xx yet?")! I do hope someone does make some kind of comment this time. Having once started thinking about it, it won't let me go!! This was it:

I thought I'd put some questions that occurred to me as a result of a contribution in 'Bookings' - here - which seem to have gone unnoticed, so I thought I'd post them again in this more suitable place.

The questions are not so much for us ourselves - at least not at this stage - but more for folk in general. The thing is - many many questions are put - and answers given - on buying a property, but what about when it comes to selling? Not a subject for huge enthusiasm, granted.

My questions were these:
What do other people think about the feeling of being obliged not to carry on advertising if one is in the process of selling? There have been a couple of other posts recently about having successfully sold a property and how to inform those who've previously booked. Does it make a difference, ethically, if you're selling as a holiday let or as a 'regular' house? If you take it off the market, in the current conditions how can you afford the ongoing expenses, with the prospect of maybe having to wait years to sell? Just a thought that crossed my mind.

.... in response to these comments made in the above-mentioned post:

Katie, I just had a look at your site again and I get a 'page not found' whenever I try to visit the Les Jets page, whichever link I click to go there ....

Hi FC - thank you but that is because that is the house that the comrpomis de vente has just been signed for so I can't really have it on the web site as available to rent! I will be contacting my website guy to remove it from the menus etc.
It sold really quickly which was surprising but a relief as means we will have some money to pay inheritance taxes etc.

So, in a nutshell, if you've just the one property and think maybe you're more likely to sell as a private property for 'normal' occupancy, rather than as a viable holiday letting business with minimal profits (as backed up by several posts on LMH that indicated one could really only generate big profits if one had several properties), does it really make sense to shut up shop and not advertise? Knowing that given the state of the property market, it could take months (years) to sell?

And on a practical note, if you're taking bookings and haven't announced that you're trying to sell, how on earth do you organise viewings, particularly if you're not on-the-spot? By an agent, on change-over day?

Interestingly, I came across this phrase in a cottage's terms and conditions a while back:
"22.Sale of rental property: In the event that the property is sold after bookings have been made, then the owner reserves the right to cancel bookings and return all monies paid." Is it maybe wise to incorporate a clause like this at some point in one's holiday-letting career?!!!

Just thoughts that occur to one in the middle of the night!

[Nemo]

Well I'll pop in and say hellp Wonkeye, but it's not a problem I need to consider!

Should the situation arise, then personally I would continue renting the property out. Viewings would have to be on changeover days or when it was vacant. The best option would be to try selling in the quieter winter months before the main booking season starts I guess? I'm sure you would be able to build in a minmum time frame too, so not take bookings too far in advance but still allowing you to rent a few months ahead at a time.

At the end of the day, it's your property, so you can set the rules as to how and when it sells. That may possibly lose some buyers as a result, but maybe that's the compromise you have to make?

[Yorkshire Lass]

We bought our second holiday let property last year and at the time we bought it the house was already being used for holiday letting so we had to view on changeover or vacant days which we understood and accommodated. When the sale went through we knew that there were several outstanding bookings but we had agreed that we would be honouring them in advance since we knew we were planning to do the same thing. For us, obviously, it was beneficial as we immediately had a very welcome source of ready-made income. All the affected guests knew the situation and just seemed pleased that we were going to carry on letting the property but I presumed that the sellers had advised them at the time they took the booking that if the sale went through it was possible the booking could be cancelled if the incoming owners were not planning to let. If we came to sell I would definitely do the same thing since as we all know in the current market properties can take a long time to sell and the losses through completely taking the property off the rental market could be huge. In fairness to guests I would highlight the situation so they could make a decision whether to proceed with a booking in advance knowing that if the property sale went through it would be a possibility that their booking could be cancelled.

[Hells Bells]

I'm not sure I could afford to stop renting it for too long.

[Mozzie]

I would keep renting it and make sure the company you are selling with have great photos for their website showing it - then if a buyer is really interested they have a good indication from the photos and should be happy about making an appointment to view it that fits with your rental obligations. Another thing I hear from real estate agents is how important it is to have your property listed at a realistic selling price for your market, otherwise your property will sit unsold for years and this in turn can put buyers off thinking something must be wrong with it.

[Wonkeye]

All very useful and practical tips - for all LMH-ers when it comes to thinking about selling. I repeat - in our case not imminent, hopefully, and OH may get a shock if he reads my question! I'm just a born worrier and try not to voice every single worry out loud, particularly if a situation may be a couple of hours (whoops - Freudian slip, I meant years) down the road! Isn't it nice to have a place one can come to for help!

Anyway, it's a relief not to have had comments like - you're legally/morally obliged to cease advertising if selling!

Nobody's picked up yet on the question about a phrase like "In the event that the property is sold after bookings have been made, then the owner reserves the right to cancel bookings and return all monies paid." in one's T&Cs at some point.

[Nemo]

Nobody's picked up yet on the question about a phrase like "In the event that the property is sold after bookings have been made, then the owner reserves the right to cancel bookings and return all monies paid." in one's T&Cs at some point.

I don't think I could morally live with myself if I put that in my T&Cs! I'm sure that's naive, and could leave oneself open to all sorts of renumeration being given in the event of those circumstances arising. However, if as a guest I read small print like that, it would probably put a doubt or fear in my mind that probably wouldn't even need to be there.

If it's a planned sale, then you can put in place appropriate plans to get around that issue or change the T&Cs at that point. If it's unplanned, due to ill health or a family death for example, then beyond a refund what else can you do? If the guest was so minded, they could take you to court, but they would have to prove that you had been negligent or failing in your duty somehow. I really don't think a judge would find in their favour in that instance.

[Normandie]

(As a chambres d'hôte) in my ts & cs I have a paragraph referring to us having to cancel a booking in the case of a catastrophic event affecting either the building (example: fire) or the owner (example: severe illness or death of owner)... and then what we'd do (refunds, find new accommodation, etc)

Perhaps a house sale - while not catastrophic exactly - could fall under a similar phrase.

It raises an interesting further point though that I hadn't thought through: if OH and I wrote ourselves off in a car crash or ferry accident, how would incoming guests be alerted? I guess I'd better put an action plan into place.

I think we have to consider these things.

[Wonkeye]

I don't think I could morally live with myself if I put that in my T&Cs! I'm sure that's naive, and could leave oneself open to all sorts of renumeration being given in the event of those circumstances arising. However, if as a guest I read small print like that, it would probably put a doubt or fear in my mind that probably wouldn't even need to be there.

Good point, Nemo

If the guest was so minded, they could take you to court, but they would have to prove that you had been negligent or failing in your duty somehow. I really don't think a judge would find in their favour in that instance.

Interestingly, I came across this issue here: http://newsgroups.derkeiler.com/Archive ... 02715.html - where amongst other things, the same conclusion was come to: In addition to specific financial losses, such as the marginal cost of alternative holiday accommodation, you *might* be able to claim damages for stress, annoyance etc. This isn't recoverable in all cases. In short, it can only be claimed if the object of the contract is to provide enjoyment. IMO holidays are one of the most obvious examples of such contracts. However, if you are able to find equivalent alternative accommodation it is debatable whether you have really suffered 'anguish' to the point of requiring compensation because you did get a holiday after all. If you do qualify for this type of compensation, be careful not to fall into the trap of overvaluing this element of their claim (like most people do). Be realistic.

And by the way, the reference in a T&C to the possibility of a cottage being sold after bookings are taken was here:
http://www.westwales-cottages.com/cefnm ... itions.htm

[Harborfields]

If I am operating a business, and selling that business as a business, then I would expect the buyer to take on the existing liabilities and commitments of the business in an ongoing fashion.

If however, I am open to selling the assets of my business (e.g. the holiday home itself) to a buyer who is not interested in taking it on as a business, then I would continue to advertise but would not take bookings more than, say, three months in advance, and thus if I did attract a buyer, I would set the closing date of the sale to follow the last booking. In other words, I would continue the business on a rolling basis, but with a furthest out time horizon that would be reasonable both for ending the business, and for completing the sales transaction.

[Wonkeye]

Should the situation arise, then personally I would continue renting the property out. Viewings would have to be on changeover days or when it was vacant. The best option would be to try selling in the quieter winter months before the main booking season starts I guess? I'm sure you would be able to build in a minmum time frame too, so not take bookings too far in advance but still allowing you to rent a few months ahead at a time.

If however, I am open to selling the assets of my business (e.g. the holiday home itself) to a buyer who is not interested in taking it on as a business, then I would continue to advertise but would not take bookings more than, say, three months in advance, and thus if I did attract a buyer, I would set the closing date of the sale to follow the last booking. In other words, I would continue the business on a rolling basis, but with a furthest out time horizon that would be reasonable both for ending the business, and for completing the sales transaction.

Just the kind of practical advice I was looking for. I can now put the subject to bed and go back to it when the time is ripe, which hopefully won't be for a good while yet! Thanks, all of you.