How to buy a property with sitting tenants in England

Now that the Renters’ Rights Act is in force, it is more difficult to obtain vacant possession. This is because Section 21 evictions were abolished on 1 May 2026, and unless tenants serve a notice to quit or surrender the tenancy, landlords will need to use the new “selling up” Ground 1A under Section 8.

Ground 1A is complex, and landlords cannot re-let the property as a rental or even serviced accommodation for a restricted period of at least 16 months after serving the Section 8 notice. There is no more testing the market after serving the notice, and then deciding to re-let the property,

Consequently, it is now more attractive to sell rental properties with tenants.

However, as buyers “inherit” the tenancy from the seller, it’s important to know what due diligence to carry out.

In this blog post, I give practical tips and answers to many of the questions about buying a property subject to an on-going tenancy, sometimes called a “tenanted property” or a “property with sitting tenants”.

Last updated: 7 July 2026

What are the benefits of buying a tenanted property?

With so many landlords selling up, every property that leaves the private rented sector is one less property that’s available for renters. At a time of a shortage of rental properties, when a landlord sells to another landlord subject to the existing tenancy, the sale is not adding to the rental housing crisis.

Here is a list of the benefits to landlords when they buy a property with sitting tenants in place:

1. Income. The buyer has income from day one, and the buyer will be able to budget knowing what the income will be.
2. Renter history. The renters are a known quantity as the buyer will know the full rental history of the tenants. (The buyer’s solicitor should ask for this during conveyancing).
3. Property occupied. Having renters from the start also means the property isn’t empty, which avoids higher costs during a void period. Click here for my blog post on reducing costs during void periods and refurbs.
4. Compliance. Theoretically, the property should already comply with landlord obligations such as an up to date Gas Safety Certificate and EICR, any selective or HMO licensing, and Article 4 consent. That said, the buyer should check, as sometimes landlords exiting the industry aren’t fully compliant. One of the properties I bought had an unsatisfactory EICR, despite having tenants. I found this shocking and required the vendor to do the remedial work before completion. Do also check that the boiler has been serviced, as sometimes landlords only get the Gas Safety Certificate.
5. Refurbishment. It is possible to phase refurbishment and maintenance, after discussing it with the renters, and checking that anything urgent is done immediately.
6. Cheaper purchase price. The price of a property with sitting tenants is usually below the market value of one with vacant possession, particularly if the rent is low.

What are the disadvantages of buying a property with sitting tenants?

Buying a property subject to an existing tenancy does have some disadvantages and risks. Here is a list of the disadvantages of buying properties with sitting tenants:

1. Lower rents
   • Rents of existing tenancies tend to fall behind those for new tenancies, especially during a period of rent inflation like the present.
   • If the tenants have been in place for more than a couple of years, unless the landlord has kept pace with the market, the rent will be lower than for equivalent properties on new tenancies.
   • This means that the buyer may need to go through the Section 13 rent review process. Click here for a guide on how to increase rents.
2. Choice of tenant
   • The buyer will inherit the sitting tenants, without having done their own credit checks or referencing.
3. Buying subject to terms of existing tenancy agreemebt
   • The buyer buys the property subject to the existing tenancy agreement, and is bound by the terms in the same way as the original landlord.
   • If the buyer isn’t happy with the terms, they have two options. Either they must get the consent of the renters to change the agreement, or they serve a Section 8 notice using Ground 1A to evict the renters. That is a long process,
   • When it comes to increasing rent, the new landlord must follow the Section 13 procedure. As long as the increase isn’t above the market, as the law stands, an appeal to the First-tier Tribunal is unlikely to be successful, although the rent increase will be delayed until after the FTT makes a determination. Click here for more information on Section 13.

Due diligence checklist for buying a property with sitting tenants

Here’s a checklist of things a buyer (and/or their solicitor) should check buying a tenanted property:

1. Tenancy agreement and amendments.
   • Copies of agreement and amendments, including any rent increases, agreed changes to the rent payment date, agreement to decorate or otherwise change the property
   • Are there any unusual terms or anything the buyer might want to change?
   • Full details of breaches of contracts, disagreements or complaints by the tenant.
   • Copies of original inventory, any changes to the inventory, and details with invoices of work done since the inventory (eg new carpets).
2. Deposit registration and prescribed information: copy of the signed deposit registration certificate and proof of the service of the prescribed information.
3. Maintenance log and details of inspections, including any reports.
4. Correspondence with tenants, inc. copies of WhatsApp messages or messages on a tenant management platform, full payment history, right to rent documentation.
5. Licensing. Is the property in an area with selective licensing or a licensable HMO? If so, does the seller have a licence? If there is a licence, what are the terms?
6. Article 4. Planning permission for change of use in Article 4 area if an HMO – click here for more information on Article 4.

>> Related Post: What investors need to know about HMOs

>> Related Post: Landlord guide to Selective and HMO Licensing

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Safety checklist for buying tenanted property

It’s really important for the buyer to make sure that they comply with the landlord responsibilities from the date of completion, or as soon as possible afterwards.

As with any new tenancy, the landlord or their agent should check that the rental property they are buying has the following items:

1. Smoke alarms on every habitable floor.
2. Carbon monoxide alarm in rooms with a “fixed combustion appliance”.
3. Working locks to external doors.
4. Safe light fittings.
5. Floor coverings.

As well as the above items, the landlord or their agent should check the smoke alarms and the carbon monoxide alarm to make sure they’re working.

It’s also sensible to carry out a detailed inspection of the property, to see whether there are any maintenance issues. Anything that is potentially hazardous or harmful should be a matter of urgency for repair.

>> Related post: What landlords need to provide in unfurnished properties

>> Related post: What are landlords’ repairing obligations?

>> Download: On-going compliance checklist for landlords

What if the seller’s paperwork is not in order?

Unfortunately, the seller might not have complied with their landlord obligations. However, if the irregularities aren’t fixed, the new landlord will be responsible.

Here’s what to do to make sure you comply with your landlord responsibilities after the sale goes through:

• Unsatisfactory EICR. Require the seller to carry out the remediations listed in the unsatisfactory EICR. Once this is done and a satisfactory EICR issued, make sure the tenant has a copy. If not, provide them with a copy as soon as possible after completion.
• No gas safety certificate. Ask the landlord to arrange for a gas safety inspection to be carried out and the certificate served on the tenants within 28 days of the inspection, and before completion.
• No How to Rent guide served.
  • This no longer matters as the How to Rent guide was withdrawn on 1 May 2026, when the Renters’ Rights Act abolished Section 21.
• Deposit formalities not complied with.
  • Landlords will not obtain an order for possession under Section 8unless the deposit has been protected with a Tenancy Deposit Scheme, and the tenant given the prescribed information.
  • Usually the seller will transfer the deposit to the buyer. It’s essential that the landlord lodges the deposit in a Tenancy Deposit Scheme and provides the prescribed information within 30 days.

Does the seller need to tell sitting tenants that they’re selling?

Technically speaking, the seller does not need to tell the tenants that they’re planning to sell the property.

However, as part of being a good landlord, it’s important to be open and transparent. Not only is being up front the right way to treat the people that live in the rental property, if they know what’s happening, they’re more likely to be cooperative.

Once the sale goes through, the seller should check with the landlord that they have served a notice under Section 3 of the Landlord and Tenant Act 1985 as, until then, the seller remains liable for breaches of the tenancy agreement.

What does the buyer need to tell sitting tenants after buying rental property?

1. The buyer must serve a Section 3 change of landlord notice on sitting tenants

After the sale goes through, the buyer becomes the landlord, and Section 3 Landlord and Tenant Act 1985 states that the buyer must provide the tenant with their name and address. The deadline for this is no later than the next day on which rent is payable. There are exceptions if the rent is payable more than two months later.

In practice, landlords do write the tenants fairly promptly to ensure that they start to receive the rent from the tenants.

Until this is done, the seller remains liable for any breach of the tenancy agreement. The old landlord has the right to provide the tenant with their new landlord’s name and address. It is an offence for the new landlord to fail “without reasonable excuse” to provide the notice and they can be fined by up to £2,500.

2. The buyer must serve a Section 48 notice on sitting tenants

The buyer must also give a similar notice under Section 48 Landlord and Tenant Act 1987 where they must provide the tenant with ‘an address in England and Wales at which notices (including notices in proceedings) may be served on him by the tenant’.

Usually these two notices are combined in the same document, unless the buyer carries on with the same agent.

Template notification of change of landlord (Section 3 & Section 48 Notice)

Here is an example of a letter that a landlord can send tenants after completing on the purchase of a tenanted property to comply with Section 3 of the Landlord and Tenant Act 1985 and Section 48 of the Landlord and Tenant Act 1987. I’ve given alternate versions for unincorporated landlords and those that are limited companies.

Although not strictly part of the requirements under the Landlord and Tenant Acts, the last paragraph advises the tenants who they should contact for maintenance issues, and includes a request to visit the property to inspect the property for maintenance purposes.

>> Related Post: A Guide to Section 48 Notices

>> Related Post: How to carry out a successful inspection

How to renegotiate the rent with sitting tenants

Increasing the rent is one of my least favourite jobs as a landlord. However, in periods of high inflation like we have seen since the pandemic, not increasing the rent is decreasing it in real terms.

Given the sharp increase in market rents for new tenancies between 2022 and 2025 (see the latest Rightmove data), it’s likely that the rent being paid will have fallen behind the market.

However, it’s important to follow the Section 13 process, which is now the only way to increase rents for an Assured Periodic Tenancy.

It’s important as a good landlord to be reasonable about rent increases. As a rule of thumb I try not to increase the rent to existing tenants by more than average wage inflation.

>> Related post: How to increase rent with Form 4A Notice (Section 13)

>> Related post: The 12 key provisions in the Renters’ Rights Act

Final thoughts

Yes, it can be tricky, inheriting renters that you didn’t choose. However, buying a property with tenants means there’s one less set of renters looking for somewhere to live.

Given the shortage of rental properties and the number of landlords selling up, it’s a good thing to buy a property subject to an existing tenancy, if at all possible.

Finally, if you are buying a rental property, my bestselling book The Good Landlord Handbook takes you through the practicalities of being a landlord at every stage of the tenancy.

If you have questions, you can ask me at twice-monthly livestreams in my membership, The Independent Landlord Hub, and also access my exclusive courses, guides, checklist and templates.

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