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What does 'tenant in situ' mean, and what do landlords need to know before buying a property with an existing tenant?
Written by
Ben Luxon
PUBLISHED ON
May 21, 2025
Purchasing a rental property with a tenant already in place—known as a tenant in situ—can be both an opportunity and a challenge. While it’s a fairly common scenario, it introduces additional legal and practical considerations that every landlord should fully understand.
In this guide, we’ll break down what “tenant in situ” means, explore the pros and cons, and explain what to watch out for before making your investment.
A tenant in situ, also known as a sitting tenant is a tenant that is already renting a property when you purchase it and the tenant will be staying on for a period.
In some cases, a landlord will sell their property with a tenant in situ because they have a good relationship with their tenant. However, more common is they wish to sell the property and there is still a period left on the current tenancy agreement meaning the tenant cannot be removed.
Financing when purchasing a tenant in situ can be harder, and so landlords selling with a sitting tenant may have to take a below-market valuation.
Purchasing a property with a tenant already in place—known as buying with a tenant in situ—can be appealing, but it also comes with certain challenges. Below, we explore the key advantages and disadvantages to consider before making a decision.
With a tenant already occupying the property, you’ll begin receiving rent from day one—an attractive benefit for landlords looking for instant cash flow.
Avoid the time, effort, and cost involved in advertising, vetting, and securing a new tenant.
Properties with sitting tenants are often seen as higher risk by lenders, making them more difficult to finance. As a result, they may sell at a discounted price compared to vacant properties.
Since the property is already occupied, it’s unlikely to require immediate refurbishment—unlike those that are vacant and may have been left unattended.
Many traditional lenders view properties with sitting tenants as higher risk. You may need to work with a specialist lender or provide a larger deposit.
Sellers who offload properties mid-tenancy may be doing so to avoid addressing issues—whether with the property itself or the tenant.
You inherit the existing tenant, which means you haven’t had the opportunity to vet them personally. They may not align with your expectations or management style.
If the tenant isn’t a good fit, removing them can be legally complex, time-consuming, and costly.
Buying a property with a tenant in situ involves more complexity than buying a vacant one. You’ll want to ensure all legal and regulatory obligations are met, and it’s highly recommended to work with an experienced conveyancing solicitor.
Below are 13 essential checks and considerations to address before moving forward:
1. Is the Property Properly Licensed?
Certain rental properties—particularly Houses in Multiple Occupation (HMOs)—require a license. Not all landlords are aware of this or comply. Verify whether a license is needed and, if so, request the license documentation. A missing license may be a red flag indicating other compliance issues.
2. Are There Letting Restrictions in the Area?
Some local authorities impose restrictions, such as limiting new HMO conversions in areas already saturated with shared housing. Check whether any such rules could affect your ability to manage or reconfigure the property.
3. Does the Property Have a Valid EPC?
An Energy Performance Certificate (EPC) is a legal requirement for rental properties. The seller should have provided a copy to the tenant and must also supply one as part of the sale.
4. Has a Gas Safety Check Been Completed in the Past 12 Months?
All rental properties with gas appliances must undergo annual checks. If the seller can’t produce a valid Gas Safety Certificate, they may not be maintaining the property to the required standard.
5. Are Fire Safety Measures in Place and Up to Date?
There should be working smoke alarms, carbon monoxide detectors, and other fire safety provisions in place. Check when they were last tested or updated.
6. Is There a Valid Electrical Installation Condition Report (EICR)?
An EICR is required for rental properties and must confirm the electrical systems are safe. Outdated or unsafe wiring presents a serious fire risk.
7. Has a Legionella Risk Assessment Been Conducted?
While not always mandatory, a risk assessment for Legionnaires’ disease is recommended and expected as part of your health and safety due diligence.
8. Was the Tenant Provided with the ‘How to Rent’ Guide?
Landlords in England are legally required to provide tenants with the latest version of the government’s ‘How to Rent’ guide. Ensure this was done at the start of the tenancy.
9. Was an Inventory Completed at the Start of the Tenancy?
A detailed inventory records the property’s condition and contents at the start of the tenancy. If one wasn’t completed, ask for it to be done before purchase. It’s important to know what’s included and what state the property is in.
10. Is the Tenant’s Deposit Protected in a Government-Approved Scheme?
Confirm that the tenant’s deposit has been properly registered and protected. You’ll also need to arrange for the deposit to be legally transferred to you upon completion.
11. How Much Time is Left on the Tenancy Agreement?
Check the remaining term of the current tenancy. If the agreement is close to expiring, you may prefer to wait for vacant possession before purchasing.
12. What Is the Rent Amount and Who Pays It?
Confirm the monthly rent and identify who actually makes the payments. Sometimes it’s a third party, like a family member. Ensure the amount reported by the seller matches what the tenant says, and investigate any discrepancies.
13. Has the Tenant Ever Been Late with Rent?
Ask the seller to provide proof of regular rent payments, typically via bank statements. A tenant with a history of rent arrears may lead to future issues.
Final Tip: Always conduct thorough due diligence and ask whether any informal or verbal agreements exist between the current landlord and the tenant that could impact your management of the property post-sale.
Yes, properties with a tenant in situ can be profitable—provided you choose the right investment. These properties are often sold at a slightly reduced price to reflect the perceived risk, which can result in a higher rental yield for the buyer. However, this potential upside depends heavily on the condition of the property and the reliability of the existing tenant.
Before purchasing, it’s crucial to run the numbers. Ensure the expected rental yield aligns with your long-term financial goals. Be sure to factor in any major upcoming expenses, such as an aging boiler or significant repairs, that could impact profitability.
In short, buying a property with a tenant in situ can offer immediate income and strong returns, but only if the risk is justified by a solid return on investment. Careful due diligence is essential to making it work.
It’s essential to view any property in person before making a purchase—especially when there’s a sitting tenant.
A first viewing helps you understand the property’s layout, overall condition, and appeal. A second viewing gives you the chance to look beyond surface details and identify potential issues such as damp, faulty wiring, or pest infestations. Take note of any maintenance concerns, as these will become your responsibility once the sale is completed. Also, ensure the property complies with all relevant health and safety regulations.
When a tenant is in place, viewings must be handled with care and in accordance with legal requirements. Tenants must receive a minimum of 24 hours’ written notice before any viewing, and in some cases, viewings may not be allowed without their express consent—depending on the terms of the tenancy agreement.
You’ll need to coordinate with the seller to ensure viewings are arranged appropriately and respectfully. If the tenant refuses access, find out why—this may signal potential issues or tensions that could affect your decision to move forward with the purchase.
Be transparent with the tenant when requesting access for a viewing or survey. Respect their right to privacy, and approach the situation with courtesy and professionalism. Starting the relationship off on the right foot is crucial—friction early on can make managing the tenancy far more challenging if you proceed with the purchase.
Before finalizing the purchase of a tenanted property, it’s wise to have a conversation with the current tenant. An informal chat allows you to introduce yourself, get a feel for who they are, and gain insights into their experience living in the property. It can also help you assess whether they’re likely to be a reliable long-term tenant.
Key topics to discuss include:
When purchasing a rental property with a tenant in situ, it’s standard practice—either by you or your conveyancing solicitor—to carry out tenant referencing. This typically includes:
Additionally, ask the seller whether any formal notices have been served or if there have been any late or missed rent payments. This can help identify any underlying issues or potential red flags.
The existing tenancy agreement remains valid after ownership transfers. The seller or their letting agent should provide you with:
Make sure that all current occupants are listed on the agreement and check for any break clauses or terms that may impact your ability to end the tenancy if needed. Understanding the legal framework of the tenancy is crucial before taking over management of the property.
Related: What Is an Assured Shorthold Tenancy? [+Free Template]
Tenants in situ—those occupying a property at the time of sale—retain all existing tenancy rights, which can impact your ability to manage or regain possession of the property. Understanding these rights is crucial when considering such a purchase. For example, tenants in situ are protected under the Rent Act 1977. If it can be proved they moved into the property before 27 February 1997, ‘no-fault’ Section 21 notices cannot be used to evict the tenant.
The Renters’ Rights Bill, anticipated to come into effect in summer 2025, introduces significant reforms to the private rental sector in England. Key changes include:
These reforms aim to provide tenants with greater security and stability, while still allowing landlords to regain possession under justified circumstances.
Some tenants in situ may hold regulated tenancies, particularly if their tenancy began before 15 January 1989. These tenancies offer substantial protections, including:
Evicting tenants with regulated tenancies is notably challenging and often requires legal proceedings.
As such, tenants in situ can present can challenging legal complexities. It's advisable to consult with your solicitor should you have any questions or concerns regarding a tenant in situ.
Once the property purchase is finalized, it’s crucial to initiate contact with the existing tenant to ensure a smooth transition and foster a positive landlord-tenant relationship. Clear and respectful communication can alleviate uncertainties and set the tone for future interactions.
Key Steps to Take:
Purchasing a property with a tenant in situ can be a smart move for landlords looking to generate income from day one—especially if the tenant is reliable and the property is in good condition. However, the process comes with added legal complexity and requires thorough due diligence to avoid inheriting costly problems. You’ll need to do more due diligence, be prepared for legal complexities, and accept less control over who your tenant is—at least in the short term.
To make this kind of purchase successful:
This is one area property management software like Landlord Studio can prove invaluable. With tools for rent tracking, tenant communication, document storage, and compliance reminders, Landlord Studio can help simplify the transition of ownership and ongoing management of the tenancy.
You can securely store critical documents like the tenancy agreement, safety certificates, and inventory reports in one place, set automated rent reminders, and even monitor income and expenses with real-time reporting.
By leveraging the right technology, you can streamline operations, reduce administrative risk, and position your new investment for long-term success.
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Landlord Studio is an easy to use MTD compliant property management and accounting software designed for UK landlords.
Track income and expenses, run reports,, find and prescreen tenants, manage property maintenance, and more.
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