Sitting Tenants – Choosing the Correct Agent is Essential when Selling.
One of the most difficult issues to take care of when it comes to the sale and investment in real estate is cases where protected tenancies are involved. When a house or a property has become the domestic residence of tenants, who cannot be evicted by the property owner, the value and investment potential of the estate drops dramatically. Also known as regulated tenancies or rent control tenancies have the right to remain in the property until death and the tenancy can be passed to family members with the same protection.
Sitting Tenants and Life Tenants
A sitting tenant is basically what was described earlier – a tenant of a property who is allowed to stay at the property for the rest of the duration of their lives. Many of these tenants pay a fair rent, which is a fraction of the market rent and set by the Rent Office. Other tenants, known as life tenants, do not have to pay any rent to the landlord and can also stay on the property until they die. In both cases, the property owner has no power to evict the tenants, making them difficult to sell as essentially you cannot obtain a mortgage nor can the purchaser move into the property whilst the sitting tenant is living there.
What Makes Regulated Tenancies Difficult to Sell
When most people decide to buy a property, it’s so they can move into the property or if you are a rental investor you would like to get a good rental yield on you investment. As we discussed earlier a property that is occupied with a sitting tenant does not allow either purchaser to achieve their objective as you cannot evict the tenant or get a
mortgage on the property, even if you were a cash buyer the same problems would apply.
Although assured tenants pay more rent than a protected tenant they still have the same rights and also have the rent set by the rent office, which, again makes it difficult to obtain mortgage, making it difficult to sell and less valuable than a similar property that is sold with vacant possession.
Why Use a Sitting Tenant Agent over Traditional Real Estate Agents?
Most traditional estate agents are not familiar with the legalities that involve property with these types of tenancies with secure tenants and do not have the specialist knowledge involved in valuing the property. Another option is to sell your property at auction but this comes with risk as the price you achieve is dependent on who is in the room bidding. Selling through a specialist agent will help you achieve the correct value for your property. Sitting Tenant Brokers have been selling these types of properties for over 10 years and have over 200 hundred cash buyers, including large property funds and pension funds who understand the problems associated with buying property with sitting tenants.
If you have a property with a sitting tenant, assured tenant or a life tenant, we would be happy to discuss the sale with you.
Sitting Tenant Brokers