Sitting Tenants, Protected Tenancy guide

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Sitting Tenants : Protected Tenancy

Tenancy Law Article

25 Oct 2012

Sitting Tenants - Protected Tenancy

Sitting Tenants

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Sitting Tenants and You

As an architect, you should take a great interest in the current value of any building which you have helped to design and seen through the construction process. Who wouldn’t want to have such financial successes on their CV?

In today’s declining market there are many things which can affect the value of a property – some things can be helped like the maintenance and upkeep of the building. However, one such thing which can’t be controlled when it comes to buildings’ occupation is the law surrounding sitting tenants.

The definition of a sitting tenant differs from case to case, but typically it involves an occupant of a property that is, by law, a protected tenancy. Any such tenancy that began before January 1989 is subject to the Rent Act 1977 – meaning that any occupants who began their tenure before this date are, by and large, within their rights to choose to remain in those properties for as long as they wish – even the rest of their lives – retaining the same rights for their entire stay including a rent price which stays consistent and low when compared to the current market prices.

With property prices rising and demand falling, the shortfall between a sitting tenant’s rent and the actual mortgage payments can become a huge drain on a landlord’s financial resources – with the guaranteed tenure of a sitting tenant there’s also little which can be done to satisfy all parties concerned. The value of the property as a whole – say, a block of flats – will continue to decrease as the maintenance and upkeep becomes unaffordable with the lower income you’re receiving. What can be done to ensure that the property changes hands for the right price, and that all are okay with the outcome?

One possible solution would be to make an offer to the sitting tenant that will enable them to buy another property outright so that they are able to afford any repayments at their usual price – one that is substantially lower than current rent costs. This amount will likely be a big step up from what the property is actually worth – but for a quick sale and peace of mind for the seller it could be worth it.

Another option would be to seek legal advice as to what else can be done to reach a conclusion that’s satisfactory for both the owner and the tenant. Landlords can be very reasonable but when this much money is at stake it’s quite acceptable to seek out an alternative.

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