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Buying a Property With Tenants - Their Rights and Yours

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Within the UK, it is possible to purchase a property that already contains tenants. This is known as a tenant in situ.

A tenant may be in situ if the current landlord is unable or unwilling to evict them before the sale. These properties are more likely to be sold at a below market price and often require a cash buyer.

When purchasing this type of property, it’s important that you understand the legal rights of the tenants and your rights as a landlord. The advice and support of a conveyancing solicitor can be an invaluable tool at this stage.

Take a look at the article below to learn more about the rights of landlords and tenants in situ.

Legal rights of a tenant in situ

A tenant in situ, also known as a sitting tenant, has an ongoing agreement/contract with their landlord in the event that the property is to be sold. This agreement gives the tenant the right to continue to live in the property after the sale is completed.

When choosing to sell your property, it’s crucial that you understand all of the legal rights of the tenant in situ. These rights include:

  • Signing the lease before 1989. In the event that the renters secured their tenancy by signing a lease before 1989, they will have the right to remain in the property as per the Rent Act 1977.
  • Can they be evicted? The only way a sitting tenant can be evicted is if they break the terms of the current tenancy agreement. Having an ongoing contract with the original landlord gives the tenant the right to remain in the property, even if ownership changes.
  • How long can a tenant in situ live in the property? The tenant has the right to remain in the property until the end of the tenancy agreement unless they are evicted.
  • What happens in the event of the tenant’s death? If the sitting tenant dies during their tenancy, the right to inhabit the property can be passed to a spouse or a family member.
  • The tenant in situ leaves during the sale of the property. The buyer is responsible for any legal fees they incur when purchasing the property, and the tenant is not required to contribute.
  • Repairs, maintenance, and other services. The sitting tenant can only be charged once for any single service they receive during the tenancy.
  • The sitting tenant legislation. In the event that the tenant does not have a tenancy agreement, they will be protected by the sitting tenant legislation.

What is a sitting tenant responsible for?

The sitting tenant has a number of responsibilities that they must uphold in order to properly adhere to the tenancy agreement. These responsibilities include:

  • Paying the rent on time
  • Completing repairs - Maintaining the property’s internal condition
  • Upholding the rules of the original tenancy agreement – for example, no pets

Failing to uphold these obligations may lead to the tenant losing their right to remain in the property.

The legal rights of the landlord when buying a property with tenants

It is the legal right of the landlord to evict sitting tenants if they fail to continue to adhere to the original tenancy agreement after the sale of the property. This can include many things such as:

  • Rent arrears
  • Failing to pay the utility bills
  • Not maintaining the interior of the property
  • Getting a pet
  • Displaying antisocial behaviour
  • Subletting the property without permission
  • Not maintaining the garden

To evict a sitting tenant, the landlord must serve a Section 21 Notice. This notice will state an end date for the tenancy however unless the tenancy agreement is breached, this data must be after the fixed term for the AST.

A landlord is legally required to give tenancy a minimum of two months’ notice before an eviction.

Additionally, a new landlord has the right to get a rent officer to examine fair rent every two years. Or following significant improvements to the property.

Get expert help from our residential conveyancing solicitors in London when purchasing a property with tenants.

If you are interested in purchasing a home with tenants and which to know more about your rights as a landlord, and your tenants’ legal rights, contact residential conveyancing solicitors in London. We can help with matters involving buying property and residential disputes.

To speak to a member of our team, please contact our London office, or you can make an enquiry online, and we will get back to you shortly.