Buying a Property With Tenants in Situ

Buying a property with a sitting tenant means taking on an existing landlord and tenant relationship from the day you complete. The tenancy can affect the value of the property, the rent you receive, your mortgage arrangements and what you are able to do with the property in the future.

Before you exchange contracts, you need to understand exactly what you are buying.

Clifford Johnston & Co. acts for landlords, investors, companies and first-time buy-to-let purchasers buying residential property with tenants in situ. We investigate the property and the tenancy together, identifying issues that could affect your investment before you become legally committed.

We have more than 30 years’ experience in property law and our conveyancing team is accredited under the Law Society’s Conveyancing Quality Scheme (CQS). From our offices in Manchester and Stockport, we provide clear, thorough and commercially focused advice throughout the transaction.

Call our Residential Property Solicitors using the number at the top of this page, or complete our enquiry form to discuss buying a property with a sitting tenant.

This page relates to residential property in England. Different tenancy rules apply in Wales.

How We Will Help

Buying a tenanted property involves more than checking the legal title. You are also taking on an existing tenancy and that tenancy can directly affect the value, income and future use of the property.

We look at the transaction as a whole. We consider the tenancy alongside the property itself, reviewing the key documents and information needed to understand who occupies the property, what rent is payable, whether there are arrears or disputes, and whether the landlord has complied with the relevant legal requirements.

That wider review can also reveal issues that are easy to overlook in a standard purchase. Deposit arrangements, licensing, Right to Rent records, repair complaints, notices already served and leasehold restrictions can all affect what you are buying and what you will be able to do once the property is yours.

Just as importantly, we take account of your plans for the property. Whether you intend to hold it as an investment, increase the rent, refinance, carry out works, sell in the future or seek vacant possession, we consider the existing tenancy against those objectives.

Our role is to identify anything that could affect your decision before exchange, explain the position clearly and make sure you understand the practical consequences of taking the tenancy on.

What Does Buying a Property With a Sitting Tenant Mean?

A sitting tenant will normally remain in occupation after the property is sold. You take the seller’s place as landlord and the existing tenancy continues.

The purchase does not automatically end the tenancy. A change of ownership also does not allow you to replace the existing terms simply because you would prefer different arrangements.

“Sitting tenant” is an informal expression. The important legal issue is the type of tenancy the occupier actually holds.

Since 1 May 2026, existing assured shorthold tenancies in the private rented sector in England have become assured periodic tenancies. However, some occupiers may hold other types of tenancy. Tenancies dating from before 15 January 1989 may be regulated under the Rent Act 1977 and can provide substantially greater security of tenure.

We establish the tenancy status before exchange because it can determine what you can do with the property once you own it.

What Do We Check Before You Buy?

We investigate the tenancy alongside the usual conveyancing work on the property.

We establish when the tenancy began, who the tenant is, who actually occupies the property and what rent is payable. We examine the disclosed payment history, arrears and any payment arrangements or disputes.

We review the tenancy deposit position and the information supplied about its protection. We also consider relevant landlord compliance records, licensing requirements and Right to Rent documentation.

Where complaints, outstanding repairs, enforcement action or possession proceedings have been disclosed, we raise appropriate enquiries and advise you on their significance.

If an issue could affect the value, income or future use of the property, you need to know about it before you commit.

Tenancy Deposits, Rent and Arrears

The rental figures attached to a property should withstand legal scrutiny.

We investigate the contractual rent, disclosed payment history and any arrears. If the seller has agreed a payment plan, concession or other arrangement with the tenant, that information can be important to the value of the investment.

Where a deposit has been taken, we examine the amount, the protection arrangements and the information supplied by the seller.

The contract and completion arrangements must also deal properly with the tenant’s deposit, rent paid in advance and any rent apportionment between seller and buyer.

If your purchase depends upon a particular rental return, tell us from the outset. We will consider the tenancy in that context.

Landlord Compliance and Right to Rent

You become responsible for your landlord obligations when the purchase completes.

We review the relevant information supplied in relation to gas safety, electrical safety, energy performance, alarms, repairs and tenancy documentation. We also consider whether the applicable requirements introduced by the Renters’ Rights Act 2025 have been complied with.

Where Right to Rent requirements apply, we investigate the evidence relating to checks undertaken by the previous landlord and identify whether follow-up action will be required.

Missing or inadequate records should be identified before completion, not after responsibility has passed to you.

Buying an HMO or Licensed Property

Licensing requires particular attention when buying an occupied HMO or a property within an additional or selective licensing area.

Mandatory HMO licensing generally applies where five or more people forming more than one household occupy the property and share facilities such as a kitchen or bathroom. Local authorities can also operate additional HMO and selective licensing schemes affecting other rented properties.

An HMO licence cannot simply be transferred to a new licence holder.

We investigate the licensing position before exchange and advise you on what will be required when ownership changes. If a fresh licence application is needed, you should know that before committing to the purchase.

Can I Ask a Sitting Tenant to Leave?

Buying the property does not give you an automatic right to require the tenant to leave.

Section 21 “no-fault” possession is no longer available for private assured tenancies in England. A landlord seeking possession will generally need to rely on an applicable statutory ground and follow the correct possession procedure.

Those grounds include rent arrears and tenancy breaches, together with specific grounds where a landlord intends to sell the property or where the landlord or a qualifying family member intends to occupy it.

The sale and landlord occupation grounds cannot generally be used to obtain possession during the first 12 months of the tenancy and require at least four months’ notice. The position should therefore be checked against the date and type of the existing tenancy.

Older protected or regulated tenancies can provide substantially greater security to the tenant.

If vacant possession is important to your plans, this must be investigated before exchange. Do not assume you will be able to recover possession simply because you have bought the property.

Can I Increase the Rent After Buying?

A change of landlord does not create an automatic right to increase the rent.

For assured periodic tenancies, a landlord must follow the statutory Section 13 procedure to increase the rent. This involves serving the prescribed Form 4A and giving the tenant at least two months’ notice.

The tenant can refer a proposed increase to the First-tier Tribunal if they consider that it exceeds the open market rent.

If your projected return depends upon increasing the rent, we will investigate the current rent and tenancy history before you buy.

Buying With a Mortgage, Limited Company or SPV

The financing and ownership structure should be clear from the beginning.

We act for landlords buying personally and through limited companies and special purpose vehicles. Where mortgage finance is involved, we deal with the lender’s conveyancing requirements alongside your purchase.

The tenancy, occupancy, rent and licensing arrangements may all be relevant to the lender.

For leasehold property, we also examine the lease to establish whether subletting is permitted and whether any consent is required.

Tell us how the property is being financed and how you intend to use it when you instruct us. We will ensure those issues are considered as part of the transaction.

Buying a Tenanted Property at Auction

A tenanted auction property should be investigated before you bid.

At a traditional auction, a successful bid can create an immediate contractual commitment. By that point, it may be too late to renegotiate because the tenancy is not what you expected.

We review the legal pack together with the available tenancy, rent, deposit and licensing information.

An advertised yield does not tell you whether the tenancy presents a legal or commercial problem. An unexpected tenancy type, significant arrears or licensing issue can fundamentally change the attraction of the investment.

Contact us before bidding if you require advice on a tenanted auction property.

What Happens When the Purchase Completes?

The tenant will normally remain in occupation and you become the landlord from completion.

The change of ownership must then be dealt with correctly.

The new landlord is required to give the tenant written notice of the assignment of the landlord’s interest, together with the new landlord’s name and address. The tenant must also be given an address in England and Wales at which notices can be served under Section 48 of the Landlord and Tenant Act 1987.

The tenancy deposit, rent payment arrangements, managing agent details, licensing position and landlord records may also need to be dealt with following completion.

We review the tenancy deposit position, including the amount held, how it has been protected and the information provided to the tenant, as historic non-compliance can affect the position you inherit as landlord.

Clear Conveyancing Fees

You should know what your legal work will cost before you instruct us.

We provide clear information about our conveyancing fees based upon the property and the transaction. A purchase involving sitting tenants can require additional work where the tenancy, licensing arrangements or title need further investigation.

We explain the scope of our work and any known additional charges at the outset.

Contact us for a no-obligation conveyancing quote.

Why Choose Clifford Johnston & Co.?

Buying a property with a sitting tenant requires experienced conveyancing and careful investigation of the tenancy you will inherit.

Clifford Johnston & Co. has more than 30 years’ experience in property law. We act for first-time buy-to-let purchasers, experienced landlords, investors and companies buying residential property.

Our residential property team is accredited under the Law Society Conveyancing Quality Scheme, and the firm holds the Law Society Lexcel Legal Practice Quality Mark.

We are thorough, direct and client-focused. We do not simply report what the documents say. We explain what the legal position means for your purchase and for what you intend to do with the property.

Where an issue needs to be investigated further, we pursue it. Where a risk could affect your decision to buy, we make that clear before exchange.