Buying a Property with a sitting tenant: legal risks, rights & what buyers must know
On paper, buying a property with a sitting tenant can look like the ideal investment. The rent is already being paid, there is no void period, and there is no need to find tenants immediately after completion.
However, once you look beyond the surface — particularly with major changes to UK landlord law on the horizon — purchasing a property with a tenant in situ requires careful legal and financial consideration. You are not just buying a property; you are stepping directly into an existing legal relationship that may be difficult, slow, or costly to unwind.
Here is what you need to know before committing to a purchase with a sitting tenant.
What Is a Sitting Tenant?
A sitting tenant, also referred to as a tenant in situ, is someone who occupies a property at the point it is sold and continues living there after completion.
From the moment you complete the purchase, you become the landlord, inheriting:
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The existing tenancy agreement
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All statutory landlord obligations
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Any historical compliance issues
There is no reset or renegotiation unless the tenant agrees. You take the tenancy exactly as it stands — for better or worse.
This can suit buyers seeking immediate rental income, but it can significantly limit flexibility if you intend to regain possession in the future.
Why Buying with a Sitting Tenant Is Riskier Than It Used to Be
The legal landscape for landlords is changing, and buyers must factor this into any decision involving a sitting tenant.
The Renters (Reform) Bill – What Is Changing?
The proposed Renters (Reform) Bill (also known as the Renters’ Rights Bill) is expected to introduce sweeping reforms to the private rented sector, including:
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The abolition of Section 21 “no-fault” evictions
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All Assured Shorthold Tenancies (ASTs) converting to periodic tenancies
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Possession only being possible on specific, evidenced grounds
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Increased court scrutiny and higher thresholds for eviction
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Ongoing court delays making possession slower and less predictable
In practical terms, buying a tenanted property now means accepting that regaining possession may not be quick, easy, or guaranteed.
Not All Sitting Tenants Are the Same
A key risk for buyers is assuming that all sitting tenants are on modern Assured Shorthold Tenancies. This is not always the case.
Assured Shorthold Tenancies (ASTs)
Most sitting tenants will occupy the property under an AST that has rolled into a periodic tenancy. While current law allows eviction using Section 21 or Section 8, this position is expected to change significantly under the Renters (Reform) Bill.
Rent Act Tenants (Pre-1989)
If the tenant moved into the property before 15 January 1989, they may be protected under the Rent Act 1977.
These tenancies offer:
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Long-term security of tenure
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Rent control under a “fair rent” regime
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Very limited grounds for possession
In reality, this means the tenant could remain in the property indefinitely, even if you wish to sell, redevelop, or move into the property yourself.
Your Responsibilities as the New Owner
When you buy a property with a sitting tenant, you take on full landlord responsibilities from day one, including:
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Rent collection and management
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Repairs and maintenance
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Gas safety certification
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Electrical safety compliance
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EPC requirements
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Deposit protection compliance
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Right to Rent checks
If any of these obligations were mishandled by the previous landlord, you may still inherit the legal consequences.
This makes thorough legal due diligence essential.
Key Questions You Should Ask Before Exchange
Before committing to a purchase with a sitting tenant, you should ensure you have clear answers to the following:
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What type of tenancy is in place?
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Is the tenant paying rent on time?
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Are there any disputes or arrears?
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Is the tenant’s deposit correctly protected?
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Are all safety certificates valid and up to date?
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Has any eviction notice already been served?
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Is the rent in line with market value or subject to control?
The answers will directly affect your rights, the property’s value, and your long-term investment return.
How a Sitting Tenant Can Affect Property Value
A property sold with a sitting tenant will usually command a lower price than one sold with vacant possession.
In some cases — particularly where the tenancy is long-standing or rent is regulated — the reduction in value can be significant. Discounts of 20% or more have been seen in certain parts of the UK.
For investors seeking long-term rental income, this may present an opportunity. For buyers who require flexibility, it represents a material risk that should be reflected in the purchase price.
Mortgage and Financing Considerations
Financing a property with a sitting tenant can be more challenging.
Many lenders are cautious when it comes to properties with:
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Sitting tenants
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Regulated tenancies
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Below-market or controlled rents
As a result, cash buyers are often preferred, although some buy-to-let lenders may be willing to lend depending on the circumstances.
You should confirm lender appetite before agreeing a purchase.
The Takeaway: Know Exactly What You Are Buying
Buying a property with a sitting tenant can be a sound investment — but only if you fully understand the legal and financial implications.
With increasing tenant protections, the removal of no-fault evictions, and tighter landlord regulation, you cannot assume that possession will be straightforward.
Before proceeding, you should:
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Understand the tenancy you are inheriting
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Assess the risks realistically
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Price the property accordingly
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Obtain specialist legal advice early
Because once you complete, you are not just a buyer — you are a landlord.
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