Are you buying (or selling) a property with a sitting tenant?

If you buy a property where there is already a tenant and you are taking on the tenancy, there are requirements under two pieces of legislation that you need to be aware of.

Section 3 of the Landlord and Tenant Act 1985

Under this legislation, new landlords must issue a formal Notice to the sitting tenants — which must include the landlord’s name and address — that they have taken over the property. The address must be where they actually live and not an office or other registered address.

This information must be provided ‘not later than the next day on which rent is payable under the tenancy or, if that is within two months of the assignment, the end of that period of two months’. So, if the rent is paid monthly, you will have two months from the day you became the landlord to issue this information.

It is a summary offence to fail to comply with this requirement and you could be liable for a fine of up to £2,500.

If you are selling the property, note that the previous as well as the new landlord can be held liable for any breaches of the tenancy agreement, such as disrepair, if the Notice has not been issued. If you are the previous landlord, therefore, it is advisable to protect yourself by providing your own Notice, including the new landlord’s name and address.

Section 48 of the Landlord and Tenant Act 1987  

Under this legislation, the new landlord must issue a Notice giving an address where notices can be served on him or her. This address must be in England or Wales, but does not have to be where the landlord actually lives — it could be the address of a managing agent, for example. If a tenancy agreement has been issued which includes this information, that is sufficient to fulfil this requirement.

It is important to note that a landlord cannot demand rent from a tenant if this information has not been provided. This may also affect any possession proceedings.

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Distinct Property Consultants offer a range of property management services for investors, including advice on legal aspects of buying an investment property. Please consult our web page or call us on 01608 695252 for further information.

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