Sitting tenant
A sitting tenant is someone who is already living in a property under a valid tenancy when the property is sold or transferred. The tenancy continues on the same terms and the buyer simply becomes the new landlord. The tenant does not have to move out just because ownership changes.
Selling with a sitting tenant usually means a lower sale price than with vacant possession, because the buyer takes on an ongoing tenancy, rent level and any repair or compliance issues. However, it can be attractive to investor buyers who want an income stream from day one.
The rights of a sitting tenant depend on the type of tenancy. Older regulated (Rent Act) tenants often have very strong security and “fair rent” rules, making it difficult to recover possession or raise rent significantly. Assured tenancies and post Renters’ Rights Act commencement periodic tenancies still give substantial protection: you or a buyer can only seek possession using the statutory grounds, not simply because you want the property back or wish to raise the rent sharply.
Any buyer should carry out careful due diligence on the tenancy, rent arrears, deposit protection and standards to understand exactly what obligations they are inheriting with the sitting tenant.
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