Following statistics, recently released by agency group Countrywide, after analysing over 65,000 rental properties they revealed that last year some 11% of all rental properties that were bought by an investor came with a sitting tenant in the mix. London has come up on top, where the proportion of landlord purchases with a sitting tenant is highest; with over a quarter of all purchases by landlords in 2014 up from 12% on 2008.
At Yellow Oak Inventories we believe that this is great news for renters, as it shows that if a landlord decides to sell his property that it won’t affect a tenant’s living conditions or tenancy. The main benefit of buying with a sitting tenant is that by keeping the existing tenants there will be no void and you can start receiving rent from day one. But with more landlords looking to buy from other landlords who already have a tenant in place, are there any pitfalls to this trend that you should be wary of?
With this in mind we have devised the following tips for those of you who are thinking of buying a property with sitting tenants included:
- Copy of Inventory
Included within all of the property paperwork, make sure there is a correct copy of the inventory report from when the sitting tenant moved in. What with a quarter of sitting tenants signing contracts of 2 years or longer, a copy of the inventory report is extremely important to protect against any claims or disputes at the end of the tenancy.
Don’t forget to ask whether there are any copies of mid-term reviews/inspections too, for extra protection as well as insight into how your new tenant has been treating the property over the term of their tenancy with the previous owner.
As the new landlord you have a right to reference check the sitting tenants, but you are not entitled to charge them for this. Be sure to check whether they have the right to reside in the UK also, to comply with the upcoming immigration right to rent legislation that will soon cover the whole of the UK, following the conclusion of the West Midlands pilot scheme (which is currently still underway).
- Deposit protection
Make sure you have proof that this has been carried out correctly by the previous landlord, including serving the paperwork to the tenant. It wouldn’t hurt to have written confirmation that this has been carried out too directly from the tenant, as an extra safety net.
- Rent Guarantee Insurance
Because you haven’t hand-picked this tenant from the start you have no idea whether they are a good tenant or not, so obtaining rent guarantee insurance would be a good idea to consider.
Still not sure whether you should take on a new buy-to-let property with a sitting tenant? Then please get in contact with us today for further advice – either by phone: 020 3713 4933, by email: firstname.lastname@example.org or via Facebook or Twitter.