Property with an Existing Tenant: What Are My Obligations?

Author: Sarah Clark

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.

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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.

The Next Step

Now that you have read through the advice above, you might want to put it into practice. Our Landlord Obligations Checker lets you tell us about your rental property and find out which UK landlord obligations you must meet right now. Try it now →

13 questions

Ask The Property Landlord a Question

Brummy 10/10/2017 at 5:04 am

I have a sitting tenant does the housing act 1985 apply to me as it's not an AST. What are my legal obligations for repair? Her intercom is broken but s that my responsibility and her grouting in bathroom ?

Smithy 18/07/2017 at 12:00 pm

question - house that is let out to tenant has had front widow smashed in (double glazing so only 1st panel). I asked a glazier to replace the panel, as he was driving there he so 3 lads throw a brick and smash the remaining panel. The tenant was in and he ran out and was arguing with them and a fight broke out. I'm assuming he knows these lads and they have a problem with each other. What should I do? If I pay to replace the full window and it happens again do I have to pay again and again etc etc

MT 22/03/2017 at 3:44 pm

We currently manage a property with a sitting tenant residing in it. She recently fell as she is quite elderly and of ill health. She broke her ankle and has been in a care home for the past 3 months.
She is due to return to the property in April but will be bed bound with carers coming to check up on her. It is not safe for her but she refuses to leave. What can we do?

ThePropertyLandlord Editor 22/02/2017 at 10:02 am

This is a tricky situation if the other freeholder does not have the funds to carry out the repairs, as your recourse would be to take the matter to court. You don't say whether you and the other owner have an agreement such as a trust deed which specifies how the building is going to be run and who is responsible for particular areas of the building. Therefore, you would need to seek legal advice regarding this to explore your options. Often, a solicitor's letter outlining the owner's responsibility to the building may jolt her into some course of action, especially if she thinks legal action might follow as a result.

Jac 21/02/2017 at 11:04 am

I have bought three quarters of an uninhabitable, large house of major disrepair. The remaining quarter belongs to a lady whose daughter died in the property and she thereby has strong emotional feelings towards her top floor, empty flat. The roof needs to be replaced urgently as there is serious water damage throughout and so I cannot begin refurbishment on the house until the roof is renewed. The lady refuses or does not have the funds to replace her share of the roof but will not sell the property due to her emotional ties. What can I do?

Ree 06/02/2017 at 7:54 pm

I have just bought a house with a tenant, at auction.
Problem is I cant seem to insure the house. Insurers want a tenancy agreement with my name on it, which I dont want to give as she is wanting to go and I dont want to change her mind.
I cant give her an agreement anyway for a month as that is when we complete on the property. any advice would be so much appreciated.She has a tenancy agreement for 6 months when she first took the property approx 4 years ago.

Inahole 16/11/2016 at 8:45 pm

Hello, I have been renting my shop for just over 16 years and I think I have an assured tenancy agreement. I can't find any information on the lease about what sort it is. I would like to know where I would stand if someone bought the property and wanted me out.

jake 19/09/2016 at 10:29 pm

I have a tenant with tenancy agreement prior 1985 pays rent subject to a registration under the rents act He has not resided at the property for 9 years he has used this property solely for storage will not give me access to inspect How much notice do I have to give him And do I take rent in notice time

Georgie 10/02/2016 at 9:23 pm

I have bought a flat with a sitting tenant on an AST which was due to expire a month after I completed. I asked the estate agent who dealt with the flat and had managed the flat for the previous owner to deal with the renewal/extension of the AST for a further 6 months. This they did (or told me they did) but have only provided me with a copy of the ORIGINAL 6 month AST in the previous owners name and a copy of the Section 48 notice they sent with my details, along with details of the Tenancy Deposit Scheme which they dealt with on my behalf. I am concerned there doesn t appear to be an AST with MY name showing an extension for 6 months. Am I missing something here?The estate agent tells me everything is in order.

Bricey 08/11/2015 at 10:57 am

I've recently bought a property with a sitting tenant and I'm going to do a new AST as we are increasing the rent and recording a deposit which is currently non existent, both of which the tenant is happy with. The current AST which came with the paperwork with property only has the existing tenants' name on but she is living there with her partner. Am I within my rights to insist he goes on the tenancy agreement as well? Where would I stand legally if she left and he remained?
Thanks

Donut 07/07/2015 at 9:11 am

I'm in the middle of buying a pub, bit it as a tenant there, the tenant as already been summoned to court with the previous landlord due to non payment of rent and public liability insurance, the previous landlord wants the case, I'm wondering if I have to give him a contract or just give him notice to vacate the premises as I wish to trade myself.

Whyme 01/07/2015 at 9:00 pm

Hi, I can't seem to find anything regarding what to do when it specify's in our deceased mothers trust that her home is to be sold upon her death but the tenants are ignoring the eviction notice. They have been late with the rent at times and we've seen that they have removed the nice carpet in the front living room. We've always provided new appliances and had the roof repaired when it was brought to our attention from the property manager, lowered the rent when the economy tanked for them, we've been very nice to them. If the trust states that the house must be sold and split in equal shares between us, how is it that the tenants can just ignore the eviction notice ? Thank you for any advice you can give to us.

Editor 03/02/2015 at 3:44 am

WRONG!!!

There is a HUGE risk with regard to buying a property with a sitting tenants that has been ignored here. The sitting tenant can, in effect EVICT the landlord.

Under the law, property with sitting tenants for sale MUST be offered to the tenants FIRST before being put on the open market. If they are not offered this, if they are in a majority numerically, they have to right to FORCABLY purchase the building off the new owner at the price that he paid with costs being dumped on the new owner who loses the building to the tenants.

I know this as I used to be a sitting tenant who organised a vast counter-purchase against one of the biggest estates in London. Although most blocks failed in their attempt to buy out, three buildings did indeed managed to rip the freehold out of the new owners hands and have it registered into their names at crippling cost to the company who had bought it.

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