Evictions - A Sitting Tenant’s Rights

Many of us will own a flat or a house that is rented out. I am writing this article to point out the difference between an assured shorthold tenant and an assured tenant. Most tenancies that were created before 15th January 1989 will not be assured shorthold tenancies, they are very likely to be sitting tenants. A property that is occupied by a sitting tenant is all well and good if that is what you agreed to buy when you bought the house.

The problem arises when you ask your tenant to move out only to find out that they have the right to stay there until they die! How has this happened? There are a number of ways this could have arisen but the most likely cause is that there was never a tenancy agreement put in place. Don’t forget that after the war and through to the 1980’s tenancy agreements never really existed. Tenants were given a rent book and the landlord or his agent would come around once a week and collect the rent. Until the rent act was introduced in 1977 there wasn’t really any legislation in place to bind landlords and tenants. All they had was a verbal agreement and a rent book.

Although a fixed term may have been verbally agreed the tenancy could be terminated by either party with no real consequences. When the rent act was introduced in 1977 all of that changed. The tenants were now able to claim that by law provided they paid their rent a landlord could not simply ask them to leave. It also made a difference to the living conditions of the tenants as the landlord could no longer move tenants into slum conditions as the properties would now be visited by the local council of the fair rent office.

The fair rent officer was introduced to improve living conditions of local authority tenants as well as tenants living in the private rented sector. The rent would no longer be set by the landlord as it would need to be assessed by the local rent officer. If you are a tenant and want to find out what your rights are your first port of call should be the citizens advice bureau.

You may ask why companies are interested in buying houses with sitting tenants. The answer is that they pay a percentage of the properties vacant value and wait until the tenant dies or moves out. Obviously once the house becomes vacant it’s value shoots up. The reason that banks don’t like these types of tenancy is because the rent being paid is so low. In many cases the rent being paid by the tenant would not cover any mortgage. The banks also know that they can’t evict the tenant to get vacant possession.

Taking all of the above into consideration these types of tenancies are still considered to be good investments, provided of course property prices rise. The problem arises when the property market stalls or goes into reverse and the landlord has to subsidize a loan they have taken out elsewhere to buy the property. Because the rents that are paid are considerably lower than that of a market rent they are not always attractive to buy to let investors.

Many of these properties are in a state of disrepair as there is not enough rent to cover works that are necessary to the outside of the building, which is the responsibility of the landlord. Landlords should be aware that if they fail in their duties to keep the house or flat in a state of good repair they may receive a notice from the environmental health officer forcing them to have these works carried out. If the landlord fails to carry out these repairs under notice, the council will appoint their own contractors to carry out these works at great expense to the landlord.

As well as protected tenancies other types of steady property investments are freehold ground rents. Whilst they are not particularly sexy they do return a steady income on an annual basis with very little risk.

4274033