Buying a Property with Tenants in Situ in the UK

When buying or investing in a property in the UK, you may come across a property that has a tenant in situ, also known as a sitting tenant. This means that a tenant is already living in the property when you purchase it and there is an existing tenancy agreement in place. This can both be a great opportunity for investors as well as posing some risks. In this blog post, we will discuss the pros and cons of buying a property with a tenant in situ, the legal considerations, and the things you need to be aware of. 

What is a Sitting Tenant/ Tenant in Situ? 

A sitting tenant or tenant in situ is a tenant who is already living in the property when you purchase it. This can be beneficial for investors as it means there is an existing tenancy agreement in place, and the tenant is likely to stay in the property for some time.

What happens when you buy a property with tenants in situ?

When you buy a property with a tenant in situ, the tenant has certain legal rights and protections. These will depend on the type of tenancy in place and the tenancy agreement. Generally speaking, the tenant’s rights will remain the same, and you will take on the responsibility of being the landlord. You will be responsible for the upkeep of the property and any repair work needed. You will also be responsible for collecting the rent and dealing with any issues that arise with the tenant. 

Should you buy a property with a tenant in situ?

Whether or not you should buy a property with a tenant in situ depends on your individual circumstances. If you are an experienced landlord, it can be a great opportunity to have an existing tenancy in place and a tenant who is likely to stay in the property for some time. However, it is important to be aware of the risks involved, as it can be more difficult to manage a tenant in situ than starting a new tenancy agreement. 

The Pros and Cons of a Tenant in Situ

Pros of sitting tenants 

• Guaranteed rental income – with a tenant in situ, you are guaranteed to have a tenant in the property paying rent for the foreseeable future, which can be a great source of income for investors. 

• More secure tenancy – with a tenant in situ, the tenancy is usually more secure and long-term, as the tenant is already living in the property and has a tenancy agreement in place.

• Easier to manage – it is often easier to manage a tenant in situ than starting a new tenancy agreement as the tenant is already living in the property.

Cons

• Higher purchase price – when buying a property with a tenant in situ, you may have to pay a higher purchase price as the tenant has certain rights and protections. 

• Risk of bad tenant – there is always a risk that the tenant in situ is not a good tenant and may not pay rent or cause damage to the property. 

• Difficult to end the tenancy – it can be difficult to end the tenancy of a tenant in situ, as they have certain legal rights and protections.

Things to be Aware of When Buying a Property With Tenants in Situ

• Check the tenancy agreement – it is important to check the tenancy agreement before purchasing a property with a tenant in situ. This will ensure that you are aware of the tenant’s rights and responsibilities and that you are not signing up to any agreements that you are not comfortable with. 

• Speak to the tenant – it is a good idea to speak to the tenant in situ before purchasing the property to get an idea of how the tenancy is going and to ensure that you are both on the same page. 

• Consider the tenant’s rights – it is important to be aware of the tenant’s rights and responsibilities, as they will still be in effect even after the purchase of the property. 

Is the Property With a Tenant in Situ Profitable?

Buying a property with a tenant in situ can be a great investment, as you are guaranteed to have a tenant in the property and a source of income. However, it is important to do your due diligence to ensure that the property is profitable and that the tenant is reliable.

Viewing the Property with a Tenant in Situ

When viewing a property with a tenant in situ, it is important to be respectful of the tenant’s privacy and to ensure that they are comfortable with the viewing process. It is also important to check the condition of the property and to take note of any existing damage or repairs that need to be made.

Organising Viewings With a Tenant in Situ 

When organising viewings with a tenant in situ, it is important to be respectful of the tenant’s privacy and to ensure that they are comfortable with the viewing process. It is also important to give the tenant adequate notice of the viewing and to check the condition of the property and any existing damage or repairs that need to be made.

Speak to the Tenant in Situ

Once you have viewed the property, it is a good idea to speak to the tenant in situ to get an idea of how the tenancy is going and to ensure that you are both on the same page. It is also important to make sure that the tenant is comfortable with you taking over as the landlord and that they are aware of their rights and responsibilities.

Tenant in Situ Checks

When buying a property with a tenant in situ, it is important to do your due diligence to ensure that the tenant is reliable and that the property is in good condition. This can involve getting references from the tenant, carrying out credit and background checks, and getting a surveyor to inspect the property.

Tenancy Agreements

When buying a property with a tenant in situ, it is important to check the existing tenancy agreement to ensure that it is valid and that you are comfortable with the terms of the agreement. It is also important to ensure that the agreement is up to date and that any changes you make to the agreement are agreed upon by the tenant.

Deposits When Buying a House With Tenants

When buying a house with tenants in situ, it is important to ensure that the deposit is protected in a government-backed deposit protection scheme. This will protect the deposit in the event of a dispute between the landlord and tenant.

Handover day

On the day of the handover, it is important to ensure that all paperwork is completed correctly and that the tenant is aware of their rights and responsibilities. It is also important to ensure that all keys are handed over and that the tenant is aware of any changes to the tenancy agreement that may have been made.

Start off on the Right Foot With the Tenant in Situ

When taking over a property with a tenant in situ, it is important to start off on the right foot. This can involve setting clear expectations, being polite and courteous, and ensuring that the tenant is aware of their rights and responsibilities. 

What Rights Does a Tenant in Situ Have?

A tenant in situ has certain rights and protections that must be respected by the landlord. These include the right to a safe and secure home, the right to be treated fairly, and the right to a copy of the tenancy agreement. 

Can you sell a house with a tenant in situ?

Yes, you can sell a house with a tenant in situ. However, it is important to be aware of the tenant’s rights and to ensure that you are treating the tenant fairly throughout the process.

Can you get a buy-to-let mortgage with a tenant in situ?

Yes, you can get a buy-to-let mortgage with a tenant in situ. However, it is important to check with your lender that they are willing to lend on a property with a tenant in situ as this can affect the terms of the mortgage. 

Conclusion

Buying a property with a tenant in situ can be a great opportunity for investors, as it can provide a guaranteed source of income and a more secure tenancy. However, it is important to be aware of the risks involved and to make sure that you are aware of the tenant’s rights and responsibilities. It is also important to do your due diligence to ensure that the property is profitable and that the tenant is reliable.