2. When the property is sold with an existing tenancy, what should the purchaser and the vendor be aware of?
The purchaser should be aware of the rental amount, the deposit paid by the tenant(s), the terms of tenancy and whether the tenant pays the rent on time. Please note that a tenancy agreement may not appear on the land search record since a tenancy lasting not more than three years is not required to be registered at the Land Registry. Before the purchaser signs the provisional agreement for sale and purchase, the purchaser should ask about, and the vendor must disclose, any existing tenancy.
On the other hand, the vendor should carefully deal with any rental deposit in order to avoid future liability for it. The vendor can either refund the deposit to the tenant or transfer it to the purchaser (the new landlord) and make a proper written record of it.
For more details on this issue, please go to another topic - Landlord and Tenant.