Sitting Tenant UK 2026 — Landlord Guide to Possession and Purchase

What is a sitting tenant?

Understanding the legal nature of sitting tenancies is the starting point:

• A sitting tenant occupies a property under a legally protected tenancy at the time of sale. The tenancy binds the new owner — the tenant has the right to remain despite the change of landlord
• The most common form in 2026: a Periodic Assured Tenancy Agreement (under the Renters' Rights Act 2025). All previously fixed-term assured tenancies converted to periodic from 1 May 2026. The tenant has indefinite security of tenure unless a Section 8 ground applies
• Regulated tenants: some very long-term occupiers (with tenancies starting before 15 January 1989) may hold regulated tenancies under the Rent Act 1977. Regulated tenants have the highest level of security of tenure and rent set by the Valuation Office. These are rare but significant — seek specialist legal advice before purchasing any property with a pre-1989 tenancy
• Licensees: a lodger or occupier under a licence (not a tenancy) is not a sitting tenant in the legal sense. A licensee can be asked to leave with reasonable notice without a court order. The distinction between a tenancy and a licence depends on the actual occupation arrangement, not the label in the agreement
• Company lets: a company let (where the tenant is a corporate entity) is not an assured tenancy and is not subject to the Renters' Rights Act. The tenancy terms govern possession

Security of tenure — what a sitting tenant can and cannot be required to do

Post-RRA 2025, sitting tenants have stronger protection:

• Section 21 abolished (1 May 2026): the new owner cannot serve a Section 21 no-fault notice. The sitting tenant cannot be required to leave without a valid Section 8 ground — regardless of any agreement between buyer and seller about vacant possession
• Possession requires a court order: unless the tenant agrees to leave voluntarily (via mutual surrender), the landlord must obtain a possession order from the county court. This applies even where the tenancy was originally granted with an expectation of vacant possession on sale
• Section 8 grounds available to a new owner: Ground 1 (owner intends to use as principal home); Ground 1A (genuine intention to sell with vacant possession); Ground 8 (at least 3 months' rent arrears); and other grounds where applicable. Most grounds require 2–4 months' notice
• The 12-month rule: Ground 1A (sale) requires that the tenancy started at least 12 months before the notice is served. A new owner who purchased expecting quick vacant possession via Ground 1A may face a 12-month wait before the ground is even available
• Tenant's ability to challenge: the court must be satisfied that the stated ground genuinely applies. A tenant can challenge the landlord's stated intention to sell (for Ground 1A) or to occupy (for Ground 1)

Buying a property with a sitting tenant — due diligence

Thorough pre-purchase checks protect your investment:

• Obtain and read the tenancy agreement: confirm the tenancy type, start date, current rent, notice provisions, and any special clauses. Check whether a prior Ground 1 notice was served at the tenancy outset (required for Ground 1 possession)
• Deposit protection: confirm the deposit is protected in an approved scheme and that the prescribed information was served correctly. Unprotected deposits expose the new landlord to penalties of 1–3x the deposit amount and prevent Section 8 possession in some cases
• Safety certificates: request current gas safety record (annual), EICR (5-yearly), and EPC (10-yearly, minimum rating E). As new landlord you take on the compliance obligation from day one
• Arrears history: ask the seller for a rent ledger. A tenant in persistent arrears is an immediate compliance issue. Check whether any Ground 8 (mandatory arrears) or Ground 8A (persistent arrears) notices have previously been served
• RRA Information Sheet: under the Renters' Rights Act 2025, landlords must provide tenants with the prescribed Information Sheet. Confirm whether the existing landlord has served this — if not, you must do so promptly after taking ownership

Valuation discounts and investment returns

The sitting tenant discount reflects the cost and time of recovering vacant possession:

• Typical discount range: properties with sitting tenants are typically offered at 10–30% below vacant possession value. The discount reflects: the time to recover possession (potentially 12–24 months or more); the rent differential if below market rate; and the uncertainty of any court proceedings
• Periodic tenancy at market rent: if the sitting tenant pays market rent and the new owner intends to hold as a long-term investment, the discount represents pure value — you are buying below market value with no void period
• Below market rent: if the tenant pays below market rate (common with long-established tenancies), factor the rent differential into your return calculations. Section 13 rent increases allow one increase per 12 months with 2 months' notice — you cannot increase immediately to market rate
• Cash for keys: offering the tenant a lump sum to vacate voluntarily (surrender by agreement) is often the fastest route to vacant possession. Costs of £2,000–£10,000 are common — typically far cheaper than 12–18 months of court proceedings. Document the surrender agreement carefully
• Finance: some mortgage lenders will not lend on properties with sitting tenants or impose conditions (e.g. maximum LTV restrictions or hold-backs pending vacant possession). Check lender requirements before exchange

Frequently asked questions