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Buying a House with Tenants in Situ


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3rd May 2023 (Last updated on 22nd Apr 2024) 8 minute read

Buying a house with tenants in situ is typical for investors looking to receive immediate income. Buyers may come across properties with tenants in situ, even if they are looking for a primary residence. Selling a property with tenants on the open market can be difficult. However, some investors seek out these opportunities to add to their property portfolio.

Purchasing a property with tenants in situ is ideal depending on the buyer’s circumstances. There are advantages and disadvantages to be aware of before you proceed with the transaction.

In this guide, we’ve gathered everything you need to know about buying a house with tenants in situ.

  1. What is a Tenant in Situ?
  2. Buying Subject to Ongoing Tenancy
  3. Buying with Vacant Possession on Completion
  4. Mortgages on Tenanted Properties
  5. Do I Need a Solicitor to Buy a House with Tenants?
  6. Can You Remove Tenants After Buying a House?
  7. Pros and Cons of Buying a House with Tenants
  8. Tenancy Agreement
  9. Tenant Checks
  10. Can You Sell a House with a Sitting Tenant?

What is a Tenant in Situ?

A tenant in situ is also known as a sitting tenant. This refers to someone who is renting a property and is currently living there throughout the buying conveyancing process. The tenant can legally stay in the property for as long as the term dictates in their contract. They are protected under the Rent Act 1977. It is different from tenants in common where two or more parties have ownership interestes in the property and the shares are stated in the Declaration of Trust.

Those selling a property with tenants in situ tend to put their properties on the market for less. This is because the market is limited to investors while the tenants live in the home.

Following the end of the tenants’ contract, the new buyer can choose whether to evict the tenant or continue their tenancy agreement.

Buying Subject to Ongoing Tenancy

The most common scenario for prospective landlords is to buy a property with a plan for ongoing tenancy. This means that the tenants will remain in the property following completion. Having tenants following completion means that the buyer will receive income immediately.

Those buying a property with ongoing tenants will need to ensure the tenants have made regular rent payments. They can do this by checking the seller’s bank statements for rental receipts. This information can be obtained from the current owner or letting agent. The buyer’s solicitor should make the ongoing tenancy a clause in the contract. This will prevent gaps between losing tenants and finding new tenants.

Those purchasing the property should check what items belong to the seller and what belongs to the tenant via an inventory. If the furniture has been purchased by the seller, they may wish to take it with them. In this case, you must supply new furniture and undergo an immediate refurbishment or risk losing the current tenants.

If the tenants’ contract runs over the exchange of contracts and completion day, the buyer still cannot evict them.

Read more about What Happens on Completion Day?

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Buying with Vacant Possession on Completion

Vacant possession on completion means that the property will be empty once the transaction is complete. This can prolong the selling conveyancing process, especially in cases where the tenant does not wish to leave.

Some sellers put their property on the market with the plan to have the home vacated on completion. However, some buyers may wish for vacant possession. If you fall into the latter category, there are certain things you need to keep in mind before proceeding with the transaction.

You must look into the tenants’ legal rights. They have a legal right to remain in the property until their term has ended. If the tenant does not wish to leave, they may stay in the property until they have received a possession order.

Read more on What is Vacant Possession?

Mortgages on Tenanted Properties

You can take out a mortgage on tenanted properties. However, bear in mind that more limited lenders are willing to facilitate the extra risk.

Most investors tend to seek out the advice of a specialist mortgage broker. This is because a property with tenants in situ is considered a higher risk. Therefore, investors are typically required to provide a higher deposit. The mortgage lender will also conduct an independent valuation.

Using a specialist mortgage broker means that they can give you expert advice. They will give you a clear idea of what to expect, depending on the conditions of the market, your location, and the property type.

Read more about Understanding The Different Types of Mortgages

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Do I Need a Solicitor to Buy a House with Tenants?

The simple answer is yes, you will need to hire a solicitor when buying a house with tenants. This is because there is an abundance of paperwork that has to be reviewed and submitted when buying properties with tenants. Your solicitor will also ensure you can serve Section 21 notices once the transaction is complete. Instructing a solicitor with commercial experience is ideal. They will understand the legislative requirements that apply to tenanted premises.

Other documents your solicitor will need to check are the pre-tenancy contracts that were completed at the start of the tenancy. They will transfer the deposit from the current owner to a new deposit scheme. There are various deposit protection schemes to choose from to ensure that the money is protected.

While your solicitor will go through the legal documentation, you can use the time to conduct your research. This includes discussions with neighbours and letting agents. This means you can have a first-hand account of what the tenants are like and whether they are suitable.

Compare My Move can connect you with up to 6 experienced conveyancing solicitors. They can offer you expert legal advice and guide you through the process. Fill out the conveyancing comparison form to compare quotes and save money on your conveyancing fees.

Can You Remove Tenants After Buying a House?

It can be difficult to remove tenants after buying an investment property. If you wish to purchase a property with no tenants, you should include a clause in your contract stating this before the exchange of contracts. This ensures a vacant property on completion.

If you decide to evict your tenants after purchasing the property, there are steps you can take. You can choose to change the terms of the lease or compensate your tenants financially. However, your tenants are not legally obliged to accept these conditions. You may have to seek a court order if you attempt to force the tenants’ eviction before the end of the term.

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Pros and Cons of Buying a House with Tenants

Buying a house with tenants is not suitable for all investors. Understanding the pros and cons can determine whether it is the right investment for you. There are several distinct advantages and disadvantages to keep in mind.


Properties with tenants in situ tend to come with significant discounts and lower house prices. This is because the market is more limited, making it ideal for cash buyers looking for a good deal. Lots of homes with tenants in situ are sold at property auctions because of this.

Since the tenants will already be living at the property, the buyer doesn’t have to worry about looking for new tenants. They will be able to start making a rental income by continuing the previous agreement.

Having tenants in the property already means that the home is likely in fair condition with no need for major repairs.


Properties with tenants tend to be harder to sell. This is because you are limiting your market to investors, rather than buyers looking for their new residency.

If you want to live in the property, you may find it difficult to evict tenants. Therefore, it’s important to check the tenancy agreement before proceeding with the sale.

The buyer will be responsible for offering a safe and habitable property at all times. This means that they will have to front reparation costs and ensure all safety requirements are met.

Tenancy Agreement

The buyer’s solicitor should receive all details regarding the tenancy agreement from the seller’s solicitor or estate agent. This should include the start of the tenancy agreement, information on the deposit, and the tenants’ status. They should also ensure that the seller follows all legal requirements to ensure a smooth transaction.

If there have been any changes, this will need to be updated. The buyer’s solicitor should ensure that no unlisted people live in the property. Once the property handover has taken place, the tenants should receive the new landlord’s details.

Once the transaction is complete, the tenant will receive a Section 48 informing them of the change in ownership. This is in accordance with the Landlord and Tenant Act 1985.

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Tenant Checks

The buyer’s solicitor will conduct compulsory checks to ensure that the tenant is still suitable for the property. They will carry out the following:

  • Credit check
  • Employment check
  • Landlord reference

Another crucial step is looking into whether the tenant has been served any notices from previous landlords. Your solicitor will be able to read through the correspondence between the landlord and the tenant. These checks need to be done in order to claim any potential future rent arrears that may arise due to unpaid rent or property damage.

Your solicitor should also ask if there have been any long-term plans to refurbish the property or make major changes. They should also keep a note of any verbal arrangements that have been made with the seller.

Can You Sell a House with a Sitting Tenant?

It is possible to sell a property with existing tenants; however, it can be difficult to find a buyer. If you are planning to sell, you need to tell your tenants well in advance. A house with tenants in situ can have a negative impact on the market value.

It’s important to maintain good communication with your tenants during this time. Make sure that they are reassured that the existing tenancy agreement is in place until the established end of the term.

Your tenants will need to be given proper notice for any viewings. Sometimes, the seller may need to seek the tenants’ permission for viewings to occur.


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