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Sell a property with sitting tenants.	Tue, 15 Oct 2013 16:30
Selling a property occupied by sitting tentants can be a challenge. We asked leading property lawyer, David Smith of Anthony Gold Solicitors, to give us the low-down on why, and what can be done to effect a quick sale of a property tenanted by sitting tenants: 1. What are sitting tenants? Sitting tenant is a term usually used in relation to a tenant remaining in a property under the Rent Act 1977 although it is also sometimes used to refer to a fully Assured tenant under the Housing Act 1988. The term refers to the fact that these tenants have a very long term security of tenure, essentially for life, and are difficult to remove. That said generally some landlords would refer to an Assured Shorthold tenant as a "sitting tenant". 2. How does the presence of sitting tenants impact on the value of a property? The fact that the tenant is entitled to remain in the property limits the uses to which it can be put and this reduces its value in the open market. As most sitting tenants are protected under the Rent Act they are also subject to rent control and so they are paying far less than a market rent, limiting the potential return on the property. On average the reduction in value is about 25-40%, depending on the type of tenancy, and the rent payable. 3. Why is it difficult to sell a property with sitting tenants? Sitting tenants mean that the value of the property is limited and cannot be fully realised until an unpredictable future date when the tenant either dies or elects to leave. Therefore a sale relies on finding a property investor with sufficiently deep pockets and a long enough perspective to be prepared to put their money into such a property. (The majority of BTL lenders will also not lend on a property with sitting tenants, as they mostly require vacant possession on completion of the sale. If tenanted, BTL lenders will only lend on properties with tenants with a standard AST of no more than 12 months, to ensure that they can regain possession of the property if the landlord stops paying the mortgage). 4. What would be the best way to sell a property with sitting tenants? The most common routes to sale are through auction or through one of the specialist investment companies that purchase properties with sitting tenants, like Dream House Buyer. It is worth looking around and speaking to more than one possible investor to ensure that you get the best deal. It may also be worth obtaining the opinion of a suitably experienced valuer to help with this. Thank you to David Smith for taking part on our blog. Richard Hill, Founder of Dream House Buyer, comments: "Properties with sitting tenants can be a real problem for landlords looking to exit, but we specialise in supplying a quick and painless solution for landlords whom want to sell with sitting tenants. We have been investing in let property since 1962, and we have bought properties with all types of tenancies. We focus on buying property with regulated and assured shorthold tenants, and fully understand the complex landlord and tenant process. Our portfolio is well managed, and we take great care in ensuring that our properties are kept to a good standard, and we are are up to date with regulations and legislation. We will make a cash offer for any property which is being sold with sitting tenants, and we generally pay up to 80% of the vacant possession value". Find out more about selling property with sitting tenants >>> here. Find out why we are different to other quick sale house companies >>> here. Dream House Buyer is a family owned company that considers all types of property, and we buy property with sitting tenants too. We will make an instant cash offer for any property in the UK, regardless of the size, location, condition or value. We will buy any property that you might consider a problem - including property with sitting tenants, flats with short leases, problem tenants, unmortgageable and structurally damaged property. We also buy ground rents and portfolios. If you think we can help, then please invite us to make you an immediate cash offer for your property. http://www.dreamhousebuyer.co.uk/Sellpropertysittingtenant Contact us on 0800 1577 497 or email us info@dreamhousebuyer.co.uk

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