Buying A Property With Tenants In Situ

When a property is offered for sale with a tenant in situ, it means there is already a tenant living in it. Depending on the terms and conditions of the tenancy, the tenant will be entitled to continue to live in the property even after it has been purchased by a new owner. Just because the ownership of the property has changed, it doesn’t affect the existing tenant’s rights or override their tenancy agreement. Whether or not you buy a property with tenants in situ will be set out in the standard conditions of sale. The sale contract will either state that the property will be sold ‘with vacant possession’ or it will be sold subject to the tenancy, which means without vacant possession.

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What’s the difference between vacant and non-vacant possession?

If a property is to be sold with vacant possession, then the owner and/or the tenants must no longer be living there, come the day of completion. You may have agreed that certain items will be left by the owner, such as the white goods, carpets and curtains, and these items will appear on a list of documents for you to check but otherwise the property must be empty.

If the property is occupied by tenants but you are to be given vacant possession, they must be given the necessary amount of notice to quit, which is typically two months in England and Wales. This means that you will not be able to complete your purchase until the tenants have moved out of the property. If the tenants have not left at the end of the notice period the next step is for the seller – as the landlord – to begin possession proceedings through the Courts.

If a property is sold without vacant possession, it means that the tenants, the furniture (if it is furnished) and any other items can remain in the property once ownership has changed hands.

Are there any advantages to buying a property with tenants in situ?

Buying a property with a tenant in situ can have some real benefits for a landlord. The advantages of this scenario include:

• A decent tenant is valuable to any landlord, so having a tenant in situ saves you the trouble of finding one.
• Having a tenant in situ guarantees you rental income from day one.
• Having a tenant in situ will help with your budgeting as you know with some confidence that you will receive the rental income flow.
• Buy with access to the existing tenant’s full rental history.

What is the process for buying a property with tenants in situ?

You will need to instruct a conveyancing solicitor or conveyancer who has commercial experience. In addition to the normal checks and enquiries that are required for buying the actual property, additional checks need to be made about the nature of the tenancy and its associated rights and obligations and also about the tenant themselves.

There’s also a whole range of other legal and safety issues to attend to, such as:

• Checking the original deposit has been registered and transferring it to your name.
• Checking the property meets current safety regulations.
• Checking all the necessary certificates are in place, such as energy performance, gas, boiler and electrical.
• Checking all electrical appliances that are included in the sale have had a Portable Appliance Test in the past year.
• Checking (if furnished) that the furniture is in an acceptable condition and meets safety standards.
• Organising the payment of rent.
• Organising new Tenancy Agreements, as and when required.
• Taking an inventory.

So there are pros and cons to buying a property with tenants in situ, and this decision will very much depend upon your own personal circumstances. If you do decide to proceed with this type of purchase let your conveyancer know as soon as possible so that all necessary checks can be carried out.

How we can help

We have a proven track-record of dealing with property purchases that have tenants in situ. We will guide you though the process and ensure all checks are carried out swiftly and efficiently and we firmly believe that with the right solicitors by your side, the entire process will seem more manageable and far less daunting.

How to Contact our Residential Property Solicitors

To speak to our Residential Property solicitors today, simply call us on 0161 929 0121, or allow a member of the team to get back to you by filling in our online contact form. We are well known across the country and can assist wherever you are based. We also have offices based in Cheshire and London.

Authored by Ben Posted in News, Residential Property Tagged as