Sitting Tenants – What are they?
What is a sitting tenant?
The definition of a sitting tenant is a tenant who has the right to remain in a property for life. These tenancies are also known as ‘protected tenancies’ and include tenancies that are regulated, tenancies created before 1989 under the Rent Act 1977 and can also include some Assured Shorthold Tenancies.
Although any premises which have a tenant in situ might be described as having a sitting tenant, legally, the phrase only relates to a relatively small and decreasing number of old tenancies where the tenant has security of tenure, i.e. has the right to live there for life even if the property is sold.
The problem of sitting tenants for landlords is that a tenancy of this kind may not even end on the death of the original tenant, since the right can be passed to family members subject to certain criteria. In such a situation, the value of a property, which the Landlord may wish to sell, will clearly be very much lower with a sitting tenant than with vacant possession and it is not unusual in those situations for owners to seek to buy out the sitting tenant from the property.
Another issue with sitting tenants is that they have the advantage of paying rent below market value. Rent for the tenant is set by the Rent Valuation Office and the Maximum Fair Rents Order places a limit on any potential rent increases. However, the landlord can have the rent reviewed every two years, or when substantial improvements have been made to the property. This could include an extension or a full renovation of the property. These procedures are sometimes used tactically by landlords to increase the chances that the sitting tenants will give up the tenancy.
Sitting Tenants have few obligations other than paying rent and maintaining the interior of the premises. In contrast, the landlord will have numerous obligations that he must fulfill, such as insuring the building, maintaining the exterior and ensuring that the tenant benefits from quiet enjoyment of the property.
So what are your rights as a landlord ?
The legal options are quite limited as outlined above, but there are some technical and tactical options and good advice is paramount in assessing the exact nature of the tenancy, what your rights are and those of the tenant, whether there have been any breaches by the tenant and other relevant considerations.
We can advise on the full range of landlord and tenant issues, so if you are a landlord with a Rent Act tenant or another form of sitting tenant issue, or have general problems with tenants. You must look to the clauses in the tenancy agreement to see what rights and obligations you have as landlord, but if the tenancy is a protected tenancy, or one created prior to 1989 under the Rent Act 1977, then your tenant is likely to have security for life. If this is the case, you will have to sell the property with the tenant in situ, and as a result, at a much lower price than a property sold with vacant possession and the purchaser will have to be willing to take on the sitting tenant. Therefore it is extremely important when purchasing a property to carry out due diligence as a buyer to ensure that a property is sold with vacant possession, that proper notices have been served on regular tenants, or that you are aware that there is a sitting tenant.
If a property is purchased with a sitting tenant, new tenancy agreements can be drawn up, but the tenant does not have to sign them. The old tenancy agreement will stand, despite having a different landlord’s name on it. However, the new landlord should ensure that the tenant is aware of the change of landlord and change of rental payment details.
Can I evict a sitting tenant ?
Unless, this is provided for in the tenancy agreement, then this is unlikely and a new landlord may lose the right to rely on some of the grounds for taking possession of the property. Therefore, a new landlord must ensure that he or she can verify the start date of the new tenancy, or the dates that any notices were served. This can be done by way of Statutory Declaration from the previous landlord, prior to completing on the property.
If you are having problems with a sitting tenant, need advice on landlord and tenant matters or need Agreements or Notices drafting, Maya Bhatiani, or Matthew Price would be delighted to advise you. Please get in touch.