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As a landlord, managing your rental properties can sometimes come with unexpected challenges. One of the more complex situations you might encounter is dealing with a "sitting tenant." A sitting tenant refers to a tenant who occupies a property under an existing tenancy agreement, often for a long period, sometimes before a property is sold or during a change in ownership. Understanding what a sitting tenant is and what rights you, as a landlord, have in these situations is crucial for effective property management.
A sitting tenant is someone who continues to live in a property after the original tenancy agreement has ended. This typically occurs when a tenant has lived in a property for many years, sometimes before certain laws or rent controls were put in place.
Sitting tenants are often protected by certain laws, particularly if they’ve lived in the property for a significant period. They may have the right to remain in the property even if the landlord sells or transfers ownership to someone else, unless there are grounds for eviction.
A tenant can become a sitting tenant once their original fixed-term tenancy has ended, and they continue living in the property without a new formal agreement being put in place. For example:
Sitting tenants typically enjoy significant legal protections, particularly if they've lived in the property for many years. Here’s a breakdown of the rights of sitting tenants in the UK:
Yes, you can evict a sitting tenant, but the process depends on the type of tenancy and local laws. For assured shorthold tenancy you may end the tenancy by issuing a Section 21 notice (a no-fault eviction notice) after the fixed term ends, giving the tenant at least two months' notice. If they are in breach of the tenancy agreement, a Section 8 notice can be served, specifying the reason for eviction. Eviction of a Rent Act tenant can be much more difficult. To evict a Rent Act tenant, you must provide a valid reason (e.g., the tenant not paying rent) and prove it is reasonable to evict, which may include offering compensation or a court order.
Commenting on the impact the Renters’ Rights Bill will have on sitting tenants, Paul Sowerbutts, Head of Legal at Landlord Action, adds:
“From the perspective of the 1970s when the Rent Act was introduced the Renters’ Rights Bill is arguably achieving a better balance between landlord and tenant in the private rented sector than we have ever had so for that reason it maybe that problems with sitting tenants will become a thing of the past.”
Yes, landlords can sell a property with a sitting tenant. However, you must fulfil your responsibilities as a landlord. This includes notifying the tenant of the sale, informing them that the new owner will be taking over as the landlord, and arranging the process for future rent payments.
The presence of a sitting tenant can potentially devalue a property, particularly if they are in a regulated tenancy with below-market rent. In some cases, a sitting tenant might have a lease or agreement that is far more favourable than what current market conditions would allow. Past figures have even shown that in Scotland selling with a sitting tenant can devalue the property by 24%. However, the actual impact on property value can vary depending on the length of the tenancy, the type of agreement in place, and the market conditions at the time. In some cases, investors may see the presence of a sitting tenant as an opportunity to secure a stable, long-term rental income stream, which could make the property more attractive to them.
