Selling and buying property in London with sitting tenants: rights, incentives, and what you need to know

Buying or Selling a Property with a Sitting Tenant in London: What You Need to Know

When dealing with property sales in London, it's common to encounter sitting tenants who currently occupy the property under a tenancy agreement. Understanding what this means for landlords, buyers, and sellers is crucial to navigating the process smoothly.

What Is a Sitting Tenant? A sitting tenant has an existing tenancy agreement and lives in the property. Unlike a vacant property, the tenancy continues unaffected by the sale, meaning the tenant has the legal right to remain in the property until the tenancy ends or is lawfully terminated.

Pros and Cons of Selling with a Sitting Tenant

Pros:

Steady Income: The property generates rental income immediately,no void period.

Potential for Higher Offers: Some investors prefer properties with tenants in place, valuing immediate rental returns.

Cons:

Limited Buyer Pool: Many buyers prefer vacant possession to move in or renovate, which narrows interest.

Less Flexibility: The new owner inherits the existing tenancy, including rent levels and terms, limiting their control.

What Buyers Should Know

Buyers purchasing a property with sitting tenants should understand they will inherit the tenancy agreement, including all legal obligations.

Many sellers sell with tenants to secure a faster sale or target investor buyers. Some prefer this option if tenants have long-term leases that guarantee income.

Can Buyers Request Tenants Be Removed or Referenced Again?

Under current UK law, the tenancy rights are transferred with the property sale, and buyers cannot force tenants out without following legal procedures. Tenants maintain the right to stay until the tenancy ends or is lawfully terminated.

While buyers can conduct referencing checks during the tenancy—especially when the landlord changes—they must do so with tenant consent and in compliance with data protection laws. This referencing cannot be used as a means to unlawfully pressure tenants to leave.

Incentives for Tenants to Leave

Sometimes, landlords or buyers may wish for tenants to vacate early. Offering incentives such as a rent-free period or financial payments ("cash for keys" or "mutual surrender") to encourage tenants to leave voluntarily is legal and often a practical solution. Both parties must agree, and the terms should be documented in writing to avoid disputes. This approach saves time, avoids eviction proceedings, and provides a smoother transaction.

Disclaimer This article is for general informational purposes only and does not constitute legal, financial, or professional advice. While we strive to ensure accuracy, property laws, regulations, and market conditions may change over time. We do not guarantee the completeness, reliability, or current validity of the information provided. Readers should independently verify details and seek professional guidance before making any property-related decisions. We are not liable for any losses or damages resulting from reliance on this content.