Selling a property with a sitting tenant can be extremely difficult.
Especially if it’s done on the open market.
Tenants might not want to move and buyers will want them to.
So, what options does this leave landlords?
Read on to learn more.
What is a sitting tenant?
‘Sitting’ tenants are tenants still living in a property.
In other words, the tenant has the legal right to continue living in the property.
How long they retain this right depends on the tenancy contract.
Sitting tenants are still required to pay rent and adhere to the tenancy agreement. throughout the sale process.
Otherwise, the landlord can apply to evict them under Section 8 of the Housing Act 1988.
Sitting tenants are not required to sign a new rental agreement. The tenancy agreement they had with the previous owner of the property will still stand.
Before change rent rates, landlords should engage independent rent officers.
Are landlords allowed to sell their property with sitting tenants?
Yes, a landlord can to sell their property with a sitting tenant. They have a right to do this.
But it can bring up some unwanted challenges. So, many landlords wait until the property is vacant before selling.
Some choose to offer their existing tenant ‘first refusal’.
What are the sitting tenants’ rights?
Tenants rights depend in part on the type of contract in place.
Either way, tenants rights when landlords are selling do exist.
Non-assured shorthold tenancies
With these landlords don’t need to serve a Section 21 or Section 8 notice. They can insist on the tenant leaving at the end of the fixed-term period.
Assured shorthold tenancy
Under assured shorthold tenancies (AST), there is an initial ‘fixed term’ agreed. It’s usually 6 or 12 months.
Once this term has passed, landlords can provide two months’ notice.
Can tenancies pass on?
In properties with sitting tenants, new owners inherit the tenancy agreement in place.
In most instances, the tenancy will be an AST. The new landlord may have the right to evict the tenant from the property by issuing a Section 21 notice.
Assured or regulated tenancies provide more comprehensive tenancy rights, for example:
- Rights of succession (where they can leave tenancy rights to relatives)
- The right to stay in the property indefinitely.
Challenges of selling a property with a sitting tenant
Detracts value from property
Properties with a sitting tenant are less valuable than ones without them.
Viewing challenges
Carrying out viewings with tenants in-situ is difficult. It takes planning and you can’t be as flexible as when you haven’t got them.
It also means that you may not be able to decorate and stage the property how you want to.
Landlords should give the sitting tenant at least 24 hours’ notice before viewings. They must also book them at reasonable times.
Potential costs of getting tenants to leave
Some landlords offer their sitting tenant a cash sum to move out.
They will usually do this because the sitting tenant is devaluing their property. So, it is more cost-effective to pay them a small sum to move.
Rule changes
There are often rule changes in the UK which landlords need to be aware of. These are more important to pay attention to when you have a sitting tenant.
For example, landlords must abide by new EPC changes from 2025.
Communication
Landlords need to maintain clear and consistent communication with tenants when selling property.
This includes when they initially write a letter to tell the tenant they are selling. And communication around viewings, etc., which takes time and energy.
