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Information on selling a house with sitting tenants Sat, 24 May 2014 16:47

What is a sitting tenant?

A house or flat bought with a tenant in occupation technically has a sitting tenant.  The legal term for a sitting tenant is a person who has security of tenure in the property for their lifetime, and the tenancy can be passed to a family member on the death of the present tenant too. Even if the property changes hands, the tenant retains the right to reside there. The tenant gained this right if they entered in to a tenancy before 1989 under the 1977 rent act.

What rights do sitting tenants have?

A sitting tenant has the right to remain in the property and to pay ‘fair rent’ - which is usually below market value.

What rights does the landlord have?

The landlord has a right to have the rent reviewed by the rent officer every two years if the tenancy is protected, or every year if the tenancy is an Assured periodic tenancy. Moreover, a landlord would apply to the rent office if the property is greatly improved ie heating, rewiring, new fixtures and fittings.

How would you value a property with a sitting tenant?

The value of a house or flat with a sitting tenant will be considerably less than a property without a sitting tenant. Firstly a property with a sitting tenant is unmortgageable and therefore only saleable to a cash buyer or someone whom has a commercial banking facility available. Secondly this is a very long term investment, and the value of such property will be influenced by the rent and the age of the tenants. If, for example, the tenant lives alone and is elderly or in ill health, frankly the value would be higher than if the property was occupied by tenants aged 30 whereby potentially they could remain in occupation for 50 years, thus tying up substantial capital for a long period of time.

Furthermore, the property carries continuous management liability for the landlord, whom is responsible for home insurance, repairs and maintenance. During the lifetime of the tenancy, you may incur significant costs such as replacing the roof, upgrading the heating or rewiring.

Richard Hill of Dreamhouse Buyer comments: “We are a family owned property buying company that considers all types of property, and our core focus remains in buying houses and flats with sitting tenants. We will make immediate cash offer for any property in England and Wales.

We will buy any property that you might consider a problem - including property with sitting tenants, flats with short leases, problem tenants, unmortgageable and structurally damaged property.  We also buy ground rents and portfolios. If you think we can help, then please invite us to make you a cash offer for your property.

Contact us on 0800 1577 497 or email us info@dreamhousebuyer.co.uk

 



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