Sitting Tenant Rights: Definition and Rights On How It Works

The term “sitting tenant” or “tenant in situ” may be familiar to you if you are looking for a new home. More people in the United Kingdom are choosing to rent rather than buy a home, which is leading to an increase in the number of long-term tenants. In this article, we will define what is sitting tenant rights, its commercial property in the UK for its tenants will all be explained in this guide.

Sitting Tenant Rights

When a landlord decides to put the property up for sale, a sitting tenant is a renter who has been living there for a long time. Renters whose contracts or agreements with their original landlord are still in effect may continue to live in their apartment after it changes hands.

Buying a property with a sitting tenant

Purchasing a property that already has tenants living in it can be enticing to landlords. If you do this, you’ll receive rental income right away and won’t have to pay a letting agent or finder’s fee. Although it would be best if you erred on the side of caution, it would also be wise to do so.

The following should be considered or investigated when deciding whether or not to keep an existing tenancy:

• Are the occupants responsible landlords? Is their tenancy up to date?
• Is there any disagreements?
• What background checks or references did the original landlord do?
• Yes, they are registered with the Deposit Protection Service (DPS).
• Is there a record of the house’s condition when the tenants arrived?

Selling my property with sitting tenants.

Selling your building while tenants are still occupying it may seem like an unnecessary burden. However, it is quite a straightforward procedure.

To complete the sale of a home, it typically takes 129 days from the time the property is listed for sale. As a result, if you decide to evict your tenants before placing your home on the market, you may lose money. During the time that your home is unoccupied, you could be out four months’ worth of rent. As a result, it may make more sense to sell with tenants still in place.

What are the advantages of selling a property with sitting tenants?

There are advantages to selling a property with tenants in place, especially for the new landlord. The following are possible key draws for the buyer:

#1. Reliable and instant rental income

It is preferable for some landlords to buy properties that already have tenants. It means they won’t have to worry about finding new tenants, and they’ll be able to start collecting rent right away.

#2. Screened tenant

It is possible for a new landlord to take over a residence with the knowledge that the current tenants are already familiar with the property and how to follow their rental agreement. There is also a financial benefit for a new landlord, who does not have to conduct background checks on the tenants.

#3. Quick turnaround time

Assembling a new rental agreement with new tenants and conducting credit checks. For a new landlord, all of these tasks can be both time-consuming and costly. When the property market is sluggish and the landlord needs immediate cash, sitting tenants can be an excellent option.

#4. No estate agents.

Buying a property with tenants already in place eliminates the need for an estate agent. For the new owner, this is a time and money saver.

Sitting Tenant Rights Commercial Property 

There are numerous advantages to purchasing or disposing of commercial property rights; already occupied by a sitting tenant, whether you’re in the market to buy or sell. Commercial tenants’ rights are more limited than those of residential tenants, but they are still protected.

There is a Landlord and Tenant Act 1954 that protects commercial tenants. Businesses using rented space are protected by the Security of Tenure Act. After the contractual termination date, the tenancy will continue until it is terminated in accordance with the Act. It is only permitted to oppose the tenant’s application for a new lease; in accordance with this Act when a lease is terminated as a result of it.

In the hierarchy of rights, tenure is at the top. The start date, the length of the term, and a proposed break clause; are all included in the first draft of a lease agreement between landlord and tenant. For those sitting tenants who are unfamiliar with commercial property rights investment; a break clause is the earliest point at which a tenant can choose to terminate their lease. The landlord and tenant may have agreed to a ten-year lease with a break clause after five years.

Both the commercial landlord and the tenant benefit from break clauses. Because many new businesses fail within their first five years; being locked into a long-term tenancy agreement is an unappetizing prospect for tenants.

The landlord’s perspective, in addition to the failure of businesses, is that many tenants conduct themselves in an undesirable manner, and the landlord may well want them to leave sooner than anticipated, so a break clause serves to protect their interests in this way.

Despite the fact that the tenancy agreement includes an effective “end date,” the tenant must notify the landlord in writing if they no longer wish to rent the property. The terms and conditions of the original lease agreement will apply if notice is not given and the lease acts as an auto-renewing contract.

Sitting Tenant Rights UK

When an owner in the UK decides to put the property up for sale, the current tenant (or tenants) will be considered a “sitting tenant rights.” Even after the sale of the property, if the tenant has a contract with their landlord, they will be able to continue living there.

Sitting tenant rights in the UK, not only is the number of people renting increasing but so is the length of their leases. There is a greater chance that you will run into properties that are currently occupied. As a result of recent tax changes and negative media coverage about buy-to-let, many landlords are selling their properties.

What happens to a tenant who refuses to move out?

Having a landlord who plans to sell a property can be a stressful time for a renter. In the UK, tenants do educate themselves about their rights and responsibilities as sitting tenant in order to reduce their anxiety. First, let’s take a look at some of the most common scenarios that could arise when dealing with the rights of a sitting tenant.

#1. No Change

Rental properties are frequently sold to another landlord, who keeps the tenancy in place with only minor modifications. Everything else, aside from the landlord, should remain the same.

#2.New tenancy agreement

The tenancy agreement will be subject to change in some cases when landlords sell their properties. For example, the new landlord may want to change things like the length of the tenancy and how much rent is due. As we’ll see later in this guide, tenants do have the right to ‘fair rent.’ To reflect the new ownership of the property, many tenancy agreements are simply updated to reflect the new terms of the contract.

#3. Eviction

It is possible for a tenant to be evicted, even if it is the worst-case scenario. When a new owner takes over a property, they have the option of either renting it out to their own tenants or moving in themselves. If the buyer sees untapped potential in the property and plans to make significant changes that necessitate the building being vacant while the changes are being made, evictions may also be necessary.

Rights Of A Sitting Tenants

Ownership of the tenant’s tenancy agreement is transferred to the buyer upon completion of the purchase of the property. Section 21 notices can be used to evict tenants under an Assured Shorthold Tenancy (AST), which most landlords prefer.

However, ASTs aren’t the only type of tenancy out there. Prior to 1989, if the renter has been in the tenancy, they will be entitled to the protection of the security of tenure. This means that they are free to live there under the terms of the 1977 Rent Act. Because of this, the term “sitting tenant” was coined to describe a “tenant in place” as time went on.

Note that You don’t have any involvement in the house sale or transfer of ownership if you’re a sitting tenant.

The bulk of any administration and responsibility will be for the new landlord to deal with. However, knowing your sitting tenants’ rights is critical if you want to make sure that any changes go off without a hitch and are accurate legally. Here is the process of taking your tenants’ sitting rights.

#1. Introductions And Greet

You should meet your new landlord face-to-face or make yourself available if they request it. In the long run of having your tenants’ sitting rights, it’s in the best interest of both parties to be cordial and accommodating.

#2. Deposit Protection Scheme

You need to register and store Deposits with the DPS in accordance with the law. When there is a successful transfer of ownership of the property, your new landlord has to contact the DPS to change any relevant details.

If they haven’t told you, it’s worth bringing it up. Ensuring your deposit is safe, make sure they haven’t forgotten about it!

#3. Necessary Documents

While the new landlord should take care of most of the paperwork, you should ask for copies of a few key documents. An interest in the property has been transferred by filing this Section 3 notice. Confirmation of your landlord’s identity via Section 48 and/or Section 47 notices.