Selling a Property with a Sitting Tenant

There are two types of sitting tenants: those with tenancy agreements taken out to early 1989 who are likely to be Protected Tenants, and those taken out subsequent to that date, who are likely to have Assured Shorthold Tenancies.

The former type has a lifelong agreement which means that they, along with their immediate family members, are entitled to remain in the property until the final death. It is not difficult to envisage a situation in which such a tenancy could last one hundred years or more. Selling a property under these circumstances can be very difficult on the open market.

Assured Shorthold Tenancies are much better for the landlord as they are for specific time periods, generally ranging from six months to a few years. Even so, selling a property with this type of tenant, although less problematic than in the first case, can still be thwart with difficulties. This is particularly the case if the tenant is dependent on the Department of Social Security for payment of some or all of the rent. Even if the landlord has been diligent in ensuring that the tenant is not dependent on the DSS when the tenancy agreement was drawn up, people's circumstances change, particularly in the current recession where many people are losing their jobs. If the tenant does receive support, then it is extremely difficult to obtain vacant possession. In such circumstances the DSS are likely to insist that a court order for eviction must be obtained. This can take quite some time and can be expensive.

Under no circumstances should any duress be imposed on the tenant in an attempt to persuade them to relinquish the tenancy. To do so is an imprisonable offence. Even attempts at buying back the agreement, in effect offering the tenants money in order to persuade them to leave, must be handled extremely delicately as a court might construe this to be bringing undue pressure.

In such circumstances it is recommended that professional help be taken. There are a number of organisations who specialise in these kinds of cases and will be willing to advise the best approach such as swift capital amoungst others. There are also several companies which specifically purchase properties with sitting tenants as long term investments. Naturally there would be some price reduction compared to selling a property with vacant possession, though it should be possible to obtain 75% of the vacant possession value.