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Posted 07 Mar 2024

Sitting Tenant: What Is A Tenant In Situ?

landlord / sitting tenant / tenancy

If you’re a landlord looking to sell a property, or you're living in accommodation that’s up for sale, then you need to know about ‘sitting tenant’ rights.

If you’re a landlord looking to sell a property, or you’re someone paying rent in accommodation that’s up for sale, then you need to know about ‘sitting tenant’ rights.

So, what is a sitting tenant exactly? In the UK, a sitting tenant – also called a tenant in situ – is someone who continues renting after the landlord decides to sell their property.

Why does that matter? On the one hand, sometimes sitting tenants can devalue a property – meaning that some landlords, looking to sell, may try to evict tenants early.

On the other hand, other landlords see the benefits of sitting tenants. In fact, the National Residential Landlords Association (NRLA) argues that it makes sense to sell with sitting tenants.

That’s because NRLA research estimates that the UK may need almost 230,000 new properties a year to meet demand. Therefore, it doesn’t help matters to have lots of empty properties on top of that, while landlords are trying to sell – which can take several months.

Either way, a sitting tenant has specific rights that determine how long they can remain in the property for – let’s take a look at these now.

Sitting tenant rights (UK)

Sitting tenants rights exist because when the sale happens, there is still a valid tenancy agreement in place. This gives sitting tenants the right to stay in the property under certain conditions.

The new owner, once the sale completes, becomes a sitting tenant’s new landlord. They have to honour the existing tenancy agreement, including rent and terms, until it expires.

Current landlords cannot evict a tenant just because they want to sell – and new landlords cannot evict someone just because they are a new owner.

However, there are ways for landlords to ask tenants to leave at relatively short notice, unrelated to a property sale taking place, which I’ll explain shortly.

The current landlord can ask sitting tenants to let viewings take place for potential buyers, but with reasonable notice and access terms. In general, the selling process can be disruptive for sitting tenants. 

Therefore, they are more likely to consider their options, then potentially enact the break clause in the tenancy relatively early and look for somewhere else to live more long-term.

Keeping sitting tenants – benefits for a new owner

Some landlords looking to sell their property may be worried that sitting tenants will deter buyers. However, some property buyers are happy to take on sitting tenants.

For buy-to-let property purchasers in particular, there are several practical and financial benefits to acquiring sitting tenants, including:

  • Income: With an existing tenant, you avoid going through a period where the property earns no rent. This provides a steady income stream and helps manage mortgage payments or other expenses.
  • Reduced marketing costs: Finding new tenants involves advertising, viewings and reference checks. Retaining a good tenant usually reduces these costs.
  • Lower risk of damage: Tenants who have already lived in a property for a while are more likely to take good care of the property, potentially reducing future repair costs.
  • Continuity of care: Tenants already familiar with the property are likely to report issues promptly, allowing for quicker maintenance and potentially preventing larger problems.

However, there are potential drawbacks too – let’s take a look at these.

How much does a sitting tenant devalue a property?

Many property buyers need a mortgage to make the purchase. Unfortunately, some lenders are unwilling to offer a mortgage for a property with sitting tenants.

Therefore, sitting tenants can sometimes devalue the market value of a property. It’s not possible to provide a precise estimate of how much though – it depends on many factors.

According to insurance brokers and financial planners Alan Boswell Group, a sitting tenant could decrease the value by 20% for properties with an assured shorthold tenancy in place.

But bear in mind that for some landlords, the value of the monthly rent they receive from sitting tenants may make up for a lower property market value. Also, selling to a cash buyer without the need for a mortgage could prevent a property devaluation.

It’s possible that there will be less resistance from lenders over time, particularly given that it’s in few people’s interest to leave properties vacant for several months. For example, usually you have to pay council tax on an empty property in the UK.

Also, the NRLA article cited earlier argues investment buyers may make higher offers for properties with sitting tenants, especially if it’s a HMO (house in multiple occupation).

When landlords cannot evict sitting tenants

Many landlords wait until the tenancy agreement runs out before selling their property. Or alternatively, if tenants leave and the landlord knows they will look to sell the property soon, they won’t take on new ones in the meantime.

Landlords wanting their tenants to leave early can, for the time being, use a Section 21 notice – I’ll explain the terms shortly.

But bear in mind that – unless tenants have breached the terms of their tenancy agreement – landlords cannot evict them using Section 21 if:

  • The tenant is still in their fixed term period, or it’s under four months since the tenancy began (unless there’s a clause in the contract allowing this)
  • The property is a HMO, but does not have the required licence from the council
  • You have not put the tenants’ deposit in a deposit protection scheme and the tenancy started after April 2007
  • You have not given the tenants the Energy Performance Certificate (EPC), a ‘How to rent’ guide, or a current gas safety certificate (unless the property is electric-only)
  • In the last six months, the council has served an improvement notice or a notice that says it will do emergency works on the property

If the tenancy started a very long time ago – before 15 January 1989 – then it likely counts as a regulated tenancy.

Also known as a protected tenancy, landlords cannot evict tenants using Section 21, based on the terms of the Rent Act 1977.

If tenants have breached the terms of the tenancy agreement, landlords can use Section 8 to evict them.

Evicting a sitting tenant using Section 21 or Section 8

Section 21 eviction notices

During a tenancy with no fixed end date – a ‘periodic tenancy’ – you can use a Section 21 notice. Otherwise, you must wait until after a fixed term ends.

You must give your tenants at least two months’ notice to leave your property. But for a ‘contractual’ periodic tenancy, you may need to give a longer notice period.

This is a fixed term tenancy that has ended, but continued as a periodic tenancy. The amount of notice must be the same as the rental period, if this is more than two months.

In other words, if your tenant pays rent every three months, then you must give them three months’ notice too.

At the time of writing, the government plans to put an end to ‘no fault’ Section 21 evictions, but has not yet confirmed the timeline.

Section 8 eviction notices

Section 8 allows eviction for a variety of issues. This includes:

  • Rental payment failure: If a tenant owes rent, or consistently pays it late.
  • Damage to the property: Causing excessive damage or neglecting basic care of the rental.
  • Anti-social behaviour: Disturbing the neighbours with noise, harassment or illegal activities.
  • Breaches of the tenancy agreement: Violating other terms – e.g. inviting unauthorised occupants to live in the property.

Each reason for issuing a Section 8 notice requires evidence and proof in court.

Final thoughts: Tenants’ rights when property is for sale (UK)

People often ask me – how long before a tenant becomes a sitting tenant? Well, now you know!

Sitting tenants are renters who continue to live in a property after the landlord decides to sell it.

Landlords cannot evict a tenant just because they want to sell. New landlords cannot evict tenants just because they are the new owner either.

But there are ways for landlords to ask tenants to leave at short notice, unrelated to the property sale.

I hope you found this article useful. If so, check out my other guides on the Fine Living blog – these include articles on property searches, a first time buyer checklist and what the non-resident landlord scheme is.

There’s also an explainer on how to rent out your house or flat. Plus, find out what questions to ask when viewing a house.

If you’re a renter or landlord with any follow-up queries about sitting tenants, or you’d like to ask about something in our portfolio, we are here for you! Please don’t hesitate to get in touch.

GOOGLE REVIEWS

Jack and Simon done an incredible job working around the current restrictions with the pandemic and managed to secure a sale on our property within months. They took on all the strain and pressure of securing a sale within a tight timeframe and made us feel at ease. They took every precaution to ensure we were safe during viewings and ensured everyone followed strict rules to ensure our safety and the safety of others. Both were great at communicating and offered constructive advice throughout that helped secure our sale. Thank you both for everything

Amal Jaber

02/15/2021

Simon’s service was top notch. Professional, quick to respond and a great mediator between me and the landlord. Definitely a good experience overall. 🙌

Isauro López

09/15/2023

Simon has been a great guide and support throughout our tenancy. He was always available, helpful and he managed the communication with our landlord perfectly.

Paul Biard

08/15/2023

We noticed a significant difference when our landlord change from our previous management company to Fine Living. We received information and response to our inquiries very quickly and when needed, we were able to communicate more effectively with the landlord. We felt that Simon cared not only about the landlord but also us, the tenants.

Alejandra Cordero

02/15/2023

I had a very smooth collaboration with Simon who was reactive, a good adviser and kind. Thank you for the great service!

margot ch

05/13/2023

I recently purchased a flat through Fine Living and I couldn't be happier with the service I received. From the very beginning, the communication was outstanding. They kept me informed every step of the way, promptly answered all my questions, and were always available to address any concerns I had. The entire process was smooth and stress-free. Simon and Steve were professional, efficient, and made buying a flat a positive experience. I highly recommend them to anyone looking to buy or sell a property.

K L

05/31/2024

Simon manages a rental flat for us and we very much enjoy working with him. His service is exceptional. He takes care of everything for us and we feel totally reassured that our property is in great hands. Any little issues our tenants might have, such as small repairs etc are dealt with right away in an efficient and professional manner. We recently had a change of tenants and Simon did a fantastic job of marketing the property and finding us excellent new tenants. He is proactive, communication is excellent and he is a lovely guy to work with too! Highly recommend.

Sarah Faulds

11/15/2023

Really smooth move in process, Probably the best I’ve experienced so far living in the city! It’s been really nice having Simon/fine living as our estate agent - you can really tell they look after the tenants which can be quite unheard of nowadays.

Fleur

03/15/2023

I've known Simon for quite a while now and his expertise and effort to attend to clients/tenants queries and problems are second to none. Simon is efficient, which comes from his years of experience and therefore things get sorted quickly. In a time where things are so fast paced, it's nice to know there is someone competent in charge dealing with the situation.

Pete-Sam

02/15/2023

Simon was extremely professional and a pleasure to work with in securing a flat in London. Would certainly recommend to all

Tommy Griffin

04/25/2024

Simon is the most reliable trustworthy letting agent you can find! Paying attention to all details and doing fantastic job!I know him for 5 years, did few flats with him and all went smoothly. Try yourself and see.

Yael Epstein

02/15/2023

I would highly recommend Simon and Fine Living to anyone looking for a professional, attentive and transparent real estate agent to work with. Simon went above and beyond what I expected in order to successfully complete the sale and always did so with a helpful and respectful manner.

Alan Casey

02/15/2023

The whole process was a breeze, and everything happened in a blur. I moved from a foreign country and Fine Living was able to get everything done within a week, from answering my first message to handing over the keys. I absolutely recommend!

Merwane Drai

02/15/2022

Simon is truly a special estate agent. He's knowledgable and cares about the relationship with customers going the extra miles to inform properly and not to rush in his viewing. He makes you feel extremely taken care of and guided alongside the process.

Davide Cavagnino

02/08/2024

The service received from Simon was excellent. From ensuring all maintenance jobs were attended to, all legal requirements were adhered to and actually finding the tenant. A very seamless process. Would highly recommend.

Jennifer Nursiah

02/15/2022

Renting our first London apartment through Simon was an incredible experience! Handling everything from abroad was made effortless by Simon's exceptional assistance. He accommodated our requests promptly, addressing all queries without delay. Our experience was flawless, and we're immensely grateful to Simon. We highly recommend his services to anyone seeking to rent in London, especially from overseas.

Zvika Weksler

12/15/2023

Simon was very accomodating and helpful throughout the rental application process

Brett Felsenthal

02/15/2023

5 stars at least! Moving abroad with a property in London and a busy life I wanted someone to deal with my property. Simon has been amazing as he is personally taking care of everything. He is quick, he explains what I do not know and he is very professional. He takes on the responsibility and take actions. 100% recommended

Erika Felici

02/08/2024

Simon is professional, pragmatic and efficient. He gives us great confidence that our properties are being managed well.

Richard

04/11/2024

Simon is one of the best estate agents I have ever worked with. He really cares about looking after his clients and properties and makes the whole process easy and stress free. Would highly recommend

Manal Shaker

02/15/2023

Simon is great to work with, super friendly and responsive. I would highly recommend house hunting with him!

Kelly Lenihan

02/15/2023

Excellent service, would highly recommend.

Kirk Pereira

02/15/2022

I was really impressed by the service I received here, in particular from Jack. He was 'on it' from the start and took his time in understanding what kind of property we were after and our other requirements. He was knowledgeable, professional and gave us an all-round easy experience and personal service. To be honest, I'm still pinching myself that he managed to find us such a great place to rent. Would highly recommend.

India Semper-Hughes

02/15/2021

I recently had the pleasure of working with Simon, and I must say, he exceeded all expectations. Simon's professionalism was evident from the get-go, and his friendly demeanor made the leasing process an absolute breeze. What truly impressed me was his lightning-fast response time to all of my inquiries. No question was too small, and he always made me feel like a top priority. If you're in need of leasing assistance, look no further than Simon. He's the epitome of excellent customer service and professionalism.

Laura Giersdorf

03/06/2024

Seriously knowledgeable, very reassuring and the friendliest chap you could hope to meet. Goes well beyond "just" an estate agent. More like a high end property consultant that can talk about investment decisions, interior design and everything in between. Highly recommended!

Dipta Malik

05/07/2024

This is truly a unicorn of an organization! Simon is approachable, thoughtful, and extremely knowledgeable about his property. He made the entire process completely painless from the viewing through to signing the lease. He’s incredibly communicative and ensured that our rental was finished to the highest standard of cleanliness and repairs. We are now the proud tenants of the most wonderful home and are so grateful that we found Simon. 10/10 service, no notes!

Michaela Zamloot

10/15/2023

Simon was fantastic as both a lettings and sales agent. Very communicative and flexible in his approach.

Chloe Nankivell

02/15/2023

Very professional and offers excellent service. You will be well looked after. Impressed with the technology and quality of virtual viewings. Thank you Simon!

Arta Alfere

02/15/2021

An absolute pleasure to interact with Simon. A true professional with a mastery of the London property market. Very knowledgeable on all his properties, with high quality virtual viewings tailored to the current climate. Highly recommended.

Alfie Ashton

02/15/2021

I engaged Simon and Fine Living for the legal work on letting my home, his knowledge of the lettings market and the legal aspects made me feel very comfortable using him. We’ve got a great tenant and Simon is available should I need him for any assistance.

Kirk Smith

02/15/2023

Simon is fully hands on and on top of everything. Has made my life so easy while being an overseas landlord.

Roxanne Cohen

12/15/2023

Excellent service from Fine Living the second time around. Always kept updated & the process was thorough & seamless. Would highly recommend!

Jennifer Nursiah

02/15/2023

Simon has been an excellent professional. He was very helpful and trustworthy since the first time I visited the flat. He went out of his way to make sure my needs and the landlord's were met and the lease signed as quickly as possible. In the uncertain environment of the London property market, having Simon's help was invaluable.

Nicola Speranza

05/15/2023

Positive experience working with Simon & team, from the start with the viewing, they were very responsive and timely in getting all the my questions answered and documents sent during the letting process. Would 100% recommend their services!

Joseph Chung

02/15/2022

Easy, quick and smooth experience overall.

Ana Maa

02/15/2023

Can’t thank Simon enough for helping us secure our first flat here in London. He was super helpful during the whole process and was always available for any questions. We are really happy!

Abby Wilson

10/15/2023

Simon was a great agent. Understood what we were looking for, excellent communication and a very nice guy to work. Would highly recommend.

Luke Russo

02/15/2023

Simon is absolutely fantastic to work with. He is authentic, honest and trustworthy. As first time renters in London, Simon explained everything to us and remained accessible throughout the entire process. Definitely the best agent experience we have had.

Jackson Smith

09/15/2023

I had a very smooth collaboration with Simon who was reactive, a good adviser and kind. Thank you for the great service!

margot chollet

05/15/2023

We've been working with Simon for a number of years now and he has always been efficient and pragmatic on each letting, doing his best for both the landlord and tenant. He has also overseen works for us and is thorough in his inspections. Overall, he has been an absolute pleasure to work with.

E M

04/11/2024

Simon has been great throughout all the process. He is extremely professional and reliable, I would definitely recommend him.

Luca Baldini

05/01/2024

It's been a great experience renting a flat through Simon, he is always very kind and helpful

Tijana Markovic

02/15/2023

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