This means that, as a landlord, you can’t charge them more in a move to get them to leave the property, as they have also have the right to pay a ‘fair rent’, which is usually way below the typical market value.
If this were to happen, they would become what’s known as a ‘sitting tenant’, and it’s extremely difficult to get a mortgage on a property with such a person inside, as they’re seen as a high risk due to the cost and difficult of evicting them.
What can I do?
Normally, a landlord that has sitting tenants will have two options.
They can either evict the tenants under a Section 21 Notice, as long as the tenancy is outside its fixed term, or they can sell the property with the tenants in situ.
If you purchase this property, then you take on the previous landlord’s rights and obligations, regardless of whether you bought the property to be a landlord or a resident – meaning you will have to be a landlord whilst you sort everything out.
If the tenant is under an Assured Shorthold Tenancy (AST), you will need to get this transferred into your name.
You shouldn’t complete on any sale until you and your broker or solicitor have seen all documentation.
A new tenancy should also be signed upon the new ownership, along with any other adjustments.
I’ve bought the property to move into…
In the unfortunate event where the tenants refuse to vacate your property voluntarily, you will have to use a Section 21 Notice. This will mean you will have to wait until the AST’s fixed term ends and that you need to ensure that the previous owner met all conditions, such as deposit protection – otherwise your Notice may invalid.
For advice on getting a mortgage if you have sitting tenants in the property, speak to one of our expert advisers who will be able to help you with the next steps.