Sitting tenant

[girl78]

AIBU.
There is a property I would be interesting in buying, which is coming on the market in around 6 months time (I am in contant with the landlord).
There are currently tenants living in the property who would still be there in 6 months time.
DP says that the house will have a cheaper market price due to the sitting tenants. I think this is BS and am getting very annoyed at them. Any advice?

You're getting annoyed at them for not moving out of the house they rent?

Getting very annoyed at who? The tenants?

Nooo - at DP! Are they correct in thinking the house will have a cheaper market price just because people are living in there?

It happens - depends on many factors.

Are you planning to live in it? Mortgage co may not lend unless vacant. If btl it may have greater value as you wukd not need to seek tenants.

@LIZS - I would be BTL but as a holiday property.

call a mortgage adviser? that will give you your options, not Mumsnet

A sitting tenant is a very different thing to a tenant who has a new lease. You really need to double check this.

A sitting tenancy is one issued before 1987 and they massively handcuff the landlord.
You can’t remove a sitting tenant or terminate the tenancy or approach the tenant to offer them money to leave. Essentially you have to wait for them to leave on their own terms, which from my experience is only when they die. They’ve been in there homes for 30+ years and have full protection (which I fully support).

So yes, if they are really a ‘sitting tenant’ it does lower the value of the property significantly.

It depends if the property is being sold with vacant possession, with an assured shorthold tenancy or a sitting tenant (pre 1987 I think). Unless you are paying cash, I doubt you will be able to mortgage against the second 2 types.

So, which is it OP? Because if they are a "sitting tenant" you won't be able to use it as a holiday let. Also, their rent may be controlled under the council's rent officer, so you won't be able to increase it to market rent, which could be quite a bit more than they're paying. I know someone who's a sitting tenant in London. The landlords tried to put their rent up to 2K a month, from £700, but the rent officer only allowed an increase of about £50.

OP, sitting tenant is a legal term of art. We really need clarification as to the precise nature of the tenancy before we can advise. I would not buy a property with a true "sitting tenant".

The tenant has been in there for 2 years.
I presume that their contract will end in 6 months time (hence the landlord selling then) and the tenant will have to leave.
That’s why I thought OP was being silly by saying the property price will be reduced just becuase there are people living in the house now.

* DP

I presume that their contract will end in 6 months time (hence the landlord selling then) and the tenant will have to leave. Well, no! They can be given section 21 notice but that doesn't mean they HAVE to leave, they could hang on and wait for you to pay for bailiffs to evict them. This is more likely of they are claiming any benefits as that is what the council will advise them to do, so they don't 'intentionally make themselves homeless' which could mean they lose Housing Benefit, if they are still claiming it.

You need to check with a property lawyer, as you might find that this is what your DP means...

Oh! And if they are still there when you compete the purchase You will be their landlord.. and there is quite a bit of paperwork you MUST give them, or eave yourself open to being sued by them. Some of it has no defence so you could automatically be found liable for fines!

So please do contact an expert ASAP!

I too would like to spend thousands of pounds without even a basic understanding of what im doing

Thanks for advice everyone - I do have appointments with mortgage advisors this week and am not taking any decision lightly.

I just thought DP was being a bit archaic and silly with their opinion of “sitting tenants” reducing property value. I didn’t think a short term tenant could be considered a true sitting tenant.

Mortgage advisors are not the right people to advise you, you need to investigate the legal side.

Actually having tenants can reduce the value of the property. In my experience buyers today expect a show house and anything less they expect to get for a much reduced price. The house will never be a show house whilst there are people actually living there so in theory your DO has a good point.

Personally I think the owner is foolish and leaving far too much money on the table by not serving section 21s and preparing the house properly for sale.