Property With an Existing Tenant: What Are My Obligations?

It might seem like the answer to your problems of finding a potential tenant for your property – buying a property that already has a tenant! But there are problems and issues that come with buying any property that has tenants already installed.

What to Look Out for When Buying a Property with Sitting Tenants

You need to find out exactly how long each tenant has been in the property – not the just the date of their last tenancy agreement. Find out what type of tenancy they have, too. Most modern tenancies are assured shorthold tenancies, but you need to find out for sure before you’re tempted into taking them, and the property, on.

If the tenants have been in the property since before 15th January 1985 they will almost certainly be 'protected' tenants which means that they will be almost impossible to ever evict, and that you can’t usually charge a market rate rent for the property as all rents for protected tenancy properties have to be set by a rents officer.

If the tenants first went in between 15th January 1989 and 27 February 1997, then it’s likely that they will be assured shorthold tenants, but you should find out whether a 'section 20' notice has been served on them, otherwise they will only be assured tenants. If this is the case you will also find it difficult to evict them if you have to.

If a section 20 notice has been served, find out when. If it was after the tenancy began, it won’t be an assured shorthold tenancy, and if it was served on the same day you should be OK – but you’ll still need to be able to prove that the notice was served technically before they moved in, should you ever want to evict them.

The best scenario for you as a potential landlord is to hope that they started their tenancy after 27th February 1997 as they will almost definitely be assured shorthold tenants, which makes your life much easier.

How Do I Evict a Sitting Tenant?

If the tenancy is an assured shorthold tenancy, you should have no problems evicting your tenants if you have to, providing you follow the correct procedures. The same rules apply to ending a tenancy with a sitting tenant as they do if you selected the tenant yourself.

You will need to give the tenant notice after the end of any fixed term (usually assured shorthold tenancies start at six months, and are renewed on a rolling basis every month afterwards) and follow the procedures for ending assured shorthold tenancies.

If the tenancy is a protected one, you will probably find it very difficult to evict your sitting tenants – unless they are in breach of their tenancy agreement by falling into arrears with the rent for example.

Because of the problems that you’re likely to have with evicting a protected tenant, it’s advisable not to buy a property that has protected tenants if you’re thinking that you might want it back at some point! Even after the death of the existing sitting tenant, the rules even allow for a protected tenancy to be passed on to a spouse or member of the tenant’s family. It’s just not worth it.

If the tenancy is an assured tenancy but not an assured shorthold, you will still encounter problems if you want to evict sitting tenants. The only way you can usually evict them is if they get into rent arrears, and in this case you could use the mandatory grounds for possession, as long the rent is more than two months in arrears.