You might’ve seen the foreign-sounding term ‘tenants in situ’ and wondered the meaning behind it. If so, you are in the right place! We will explain the term sitting tenant: it refers to a situation when a tenant’s place of residence is being sold.

We have observed an increase in properties being sold with sitting tenants and most likely that trend will continue. Last year (2021) Minimum Energy Efficiency Standards were changed and by 2025 all rented properties need to have an EPC rating of minimum ‘C’.

As it’s a costly process, landlords with many properties in their portfolio realised that it’s more cost-effective to sell a property with sitting tenants.

Does a sitting tenant devalue the property?

It depends, for many landlords buying a property with a tenant is a great way to maintain the occupancy without the stress and cost of a refurb and fees for fining a new tenant. Not all tenancies are equal though…

If the tenancy agreement started before January 1989, so over 30 years ago, we call this existing tenancy agreement a protected tenancy or regulated tenancy. Regulated tenants have far greater rights including the right to fair rent. Fair rent means, that any rent increases are reviewed by a rent officer, not the landlord.

That kind of property with protected tenants may have a much bigger impact on the price than an assured shorthold tenancy.

Most tenancies are, as previously mentioned AST tenancies. The great advantage of buying a property with a sitting tenant and an ongoing contract is that you’re not just obtaining the property but also an established relationship with the tenant that only needs to be cultivated.

Investment property

When a landlord buys a property with sittings tenants he has no obligations to keep the tenants. If he’s after a vacant property with no personal possessions or prefers to have tenants of their own choice they may issue a Section 21. It is the so-called ‘no fault’ eviction process.

That only applies if the tenants have an assured shorthold tenancy agreement.

Are you a sitting tenant?

If you got a message from your landlord that they decided to sell the property you’re living in, it’s absolutely normal to feel a bit nervous.

Luckily most paperwork is on the buyer/seller side, so you don’t need to worry about that.

When the landlord decides to sell the property few things may happen:

• you will get a confirmation of the new landlord’s name and address – it’s good to keep that with the assured shorthold tenancy agreement.
• the new landlord may want to sign a new tenancy agreement
• the information that’s held in the deposit protection scheme will be updated
• the new landlord may want to meet you in person
• the new landlord may want to renovate the property
• the new landlord may evict you as he’s after a vacant property

Can a sitting tenant buy the property of residence?

Yes, sitting tenants could be potential buyers but there is no legal requirement for the landlord to give sitting tenants the opportunity to buy the property. It is up to the landlord who they are selling a property to.

Due to the nature of selling a property with sitting tenants, often the sale is completed through a modern auction or via a professional property buying company. In this instance, we’re talking about a cash purchase.

House Buy Fast helps hundreds of people a year move their homes smoothly and stress-free. The cash sale process is very easy and straightforward. Our experienced team of advisors will help you sell the property quickly.

Professional property buyers pay just below full market value but as a seller, you will avoid all the legal costs and do not need to worry about empty property costs and the sale can be completed within days.