It’s “tough to say at this stage” how legislation in the Renters’ Rights Bill will affect the number of sitting tenants, according to the National Residential Landlords Association (NRLA). The government plans to ban no-fault evictions through the bill, which could mean landlords with short-term tenants have fewer options when they decide to sell, through though it’s expected that there will be some flexibility created for landlords in that position..
“Although more landlords have exited the market over the course of this year, many still wish to stay in the sector to provide good quality private rented accommodation,” said Chris Norris, campaigns and policy director for the NRLA.
How long before a tenant becomes a sitting tenant?
A tenant doesn’t instantly become a sitting tenant just because a property goes up for sale, and the length and type of the tenancy agreement plays a role. Sitting tenants are usually people with long-term tenancies like assured (meaning you can usually live there for the rest of your life) or regulated (it started before 1989) tenancies, which give the tenant more legal protection compared to modern short-term leases.
Assured shorthold tenancies are usually fixed to run for six or twelve months, after which they will automatically become periodic tenancies if you don’t move out but no new tenancy agreement is signed. That means it’s easier for a landlord to evict, especially if you’re in England or Wales where they can do so without giving a reason via a section 21 notice.
The basic rule is that someone only becomes a sitting tenant when their landlord sells the property while they still live in it under a valid agreement.
Sitting tenant rights in the UK
If you’re a sitting tenant, you still have the same tenancy agreement and legal protections in place, which could include the right to stay in the property for the remainder of your lease, (and even longer in some cases).
It’s common for tenants to hear that their landlord is selling up and worry that they’re going to be kicked out of their home, especially if it’s a property they’ve been settled in for a long time. But if you’re a sitting tenant, your rights are better protected by the law then most people who privately rent.
Depending on the type of tenancy you have, there’s a chance the price of your rent is capped at a set level below the going market rate, even if the property is sold to someone new.
Having a new landlord shouldn’t change the security of your tenancy either. It will remain the case that you can’t be evicted without the landlord following the proper legal process, which usually means they have to prove that you breached one of the terms in your agreement – this usually means falling behind on rent or not taking care of the property. Though it’s worth remembering that as a sitting tenant, you’re entitled to the same level of maintenance and upkeep of the home as any other tenant – it being sold doesn’t change the landlord’s responsibility to keep the property in a safe and habitable condition.
A lot of potential buyers are put off by the prospect of having a sitting tenant, especially if the tenant has a regulated tenancy that allows them to stay indefinitely – some people are just looking to buy property rather than become a landlord.
Does a new landlord have to honour a lease?
Even if you have a type of tenancy that’s well protected by the law, it can be a concern that a new landlord won’t honour your lease – particularly in today’s volatile, landlord-favouring rental market. But the good news is that the new owner has to abide by the existing terms of your lease, otherwise they could be acting illegally.
On paper, and particularly for those with protected tenancies, this should mean that you’re safe from eviction as long as you keep following the terms in your tenancy agreement. Even if you have a shorter-term lease like an assured shorthold tenancy, you’re less likely to find yourself as a sitting tenant in the first place – but a new landlord is restricted by the same laws around eviction and has to give you the right notice (usually two months) and seek a court order.
So if you’re worried that a new landlord can kick you out, the answer is depends on the type of tenancy you have. But either way they have to stick to the legal process, which usually takes at least a couple of months.
What procedures should be followed?
If you’re a sitting tenant whose landlord is either in the process of selling your home or has already done so, there are specific legal steps they have to take to make sure your rights are upheld. Tenants will find it’s a relatively straightforward process for the most part but landlords have to jump through a few legal hoops before the sale can go through.
The landlord has to tell the tenant that the property is being sold first of all, and while there’s no legal requirement to give a specific amount of notice before the sale, they often choose to notify tenants well in advance to avoid problems later on.
As a tenant it’s essential that you keep paying rent to the current landlord until told otherwise. Once the sale goes through, the new landlord will likely get in touch to introduce themselves and give you details for where rent should be paid going forward. Your deposit should be transferred to the new landlord’s chosen deposit protection scheme at this point too, and it’s a legal requirement for the landlord to give you the information about where it’s now held.
“There is a formal process landlords should follow if a property is sold mid-tenancy,” the NRLA’s Chris Norris said .”A section 3 notice must be served within two months, informing the tenants of the change in ownership and a section 48 notice will confirm the new landlords’ details for service of any notices.
“There will usually also be a rent authorisation letter sent to the tenant informing them that rent will subsequent be payable to the new landlord.”
When a landlord sells a rental property with a tenant in situ, the landlord buying the home will “usually want to keep that tenant and maintain the existing, often very good, relationship,” Norris added.
“In our view, if a tenant is informed that their property is being sold with them in situ, they should continue to stay in clear contact with their landlord so that all parties are kept informed at each step of the process.
“The new landlord must make clear to the tenant that the tenancy agreement is still in effect and that they will have to honour their obligations.”
Will the council help if my landlord is selling my house?
Your local authority might be able to offer you help in some cases, but it depends on your circumstances. If you’re at risk of homelessness because the new landlord has taken steps to evict you, for example, the council will have resources in place that you can turn to and might be able to help you find somewhere else to live. But since sitting tenants are generally well-protected by the law, the chances of being evicted immediately are low.
And if you expect your new landlord will try to evict you but they haven’t started the legal proceedings yet, most councils will advise you to stay in the property until you’re formally evicted through the courts. This is, in part, because leaving voluntarily can make it more difficult to get state help with housing in future.
If at any point you’re in doubt about where you stand, contact your local tenants union or expert organisations like Citizens Advice or Shelter for guidance tailored to your circumstances.
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