About Sitting Tenants

Worried about selling a property with sitting tenants?

There are still regulated tenancies in the UK even though the last one was created over 20 years ago.

This is partly due to longer life expectancy and partly because spouses and offspring of a regulated tenant who have lived at home can inherit and succeed a tenancy. Potentially three generations could live in a property at below market rent.

When does a sitting tenant have a regulated tenancy?

This applies if a tenant:

  • Moved into a property before 15 January 1989
  • Pays rent to a private landlord and does not share facilities or live in the same house as their landlord 

They will be a regulated (sitting) tenant which means that they have considerable security of tenure and additional protection under the 1977 Rent Act (amended by the Housing Act 1988).

This means:

  • The tenant can’t be evicted by a landlord, even if the property is needed for the landlord's own family 
  • They have the right to a lower than market rental value rent 
  • They have succession of the tenancy, which means that a member of their family, or partner, which includes the same sex partner, can inherit the tenancy and security of tenancy after the death of the original tenant.

The old regulated tenancies mostly started before 1989 and some of the old 'controlled tenancies' commenced prior to 1956 but all obtained security of tenure if in existence before 15 January 1989.

Rents on succession 

Usually a spouse inherits the regulated tenancy at the old registered rent. Where a member of the tenant's family inherits, a higher rent is payable with security of tenure.

The higher rent on succession is not as high as a full market assured shorthold tenancy rent. Assured shorthold tenancies may have:

  • Extra services
  • Furniture
  • Carpets and curtains
  • Fitted kitchens and modern bathrooms
  • And they are usually let on six-month to one-year leases, so a higher rent can be charged.

In an old regulated tenancy the accommodation is generally dated and has fewer modern amenities.

Government capping of fair rent increases

In the 1990s regulated rents and registered rents started rising. The differential between registered rents and market rents started to close. To counteract this the government introduced the Rent Act (Maximum Fair Rent) Order. This set a limit on the increase in fair rents to a maximum of RPI plus 7.5% per annum of the existing registered rent and RPI plus 5% per annum for subsequent re-registrations.

Rent increases and property improvements

If you make improvements to your property you can increase the rent, but this is difficult to achieve. For example, double-glazing, although expensive, is not sufficient to increase the rental value by more than 15% – the threshold increase for allowing rents to be increased.

Any improvements to a property generally need the consent of the tenants. Any tenant has the right to decline – often the case where the tenant does not want a rent increase!

Since April 1997 all tenancies created in the private sector are assured shorthold tenancies. None after this date will be regulated or assured periodic tenancies (i.e. produce sitting tenants).

However, in exceptional circumstances assured shorthold tenancies may become assured periodic tenancies giving tenants security of tenure when created in some instances after 15 January 1989 but before April 1997.

Sinclair House Properties buys properties with sitting tenants

Sinclair House Properties will purchase freehold or long-leasehold properties that are subject to regulated tenancies and take over the protected tenancies. The protected rights of the tenant continue as before. 

For more information about sitting tenants don't hesitate to contact us today by email or by calling our FREEPHONE NUMBER