View Full Version : Rent Act tenancy; Registration prior to landlord's sale
19-09-2006, 16:20 PM
Newly-retired council gardner has Rent Act tenancy. The rent is low - but then there has been no operating heating since the mid-90s. Aside from the issues of Environmental Health action versus rise to market rent the landlord has tried and failed to browbeat the tenant into accepting a cash only offer and is putting the property on the market through a developer.
The sale ought to be on the stated basis of the inarguable sitting tenancy (there have been documented previous Rent Act Tribunal hearings). Can the tenancy be registered as an overriding interest or similar? (I understand the terminology may have changed). I don't have a copy of "Resident lettings" and the local library copy has gone AWOL.
Please reply to firstname.lastname@example.org
19-09-2006, 20:26 PM
As far as I am aware, the vendor needs to do two things: He needs first to offer the property to the sitting tenant and get certification from the tenant that he doexn't want to buy. Having done this he must tell the potential purchaser (developer) about the sitting tenant. The existence of same approximately halves the value of the property and if the developer purchases and then finds the sitting tenant in place, the vendor will be on the receiving end of some pretty expensive breach of contract legislation!!!
19-09-2006, 20:39 PM
There is no obligation and there never has been for a landlord to offer the sitting tenant the "first refusal" to buy though it is obviously the decent thing to do. (I exclude Social Housing and Council Housing from this answer - they are not Rent Act tenancies anyway)
A Rent Act tenancy belittles a property's open market value by about half to one third which is why there are property companies buying up Rent Act properties at about 75% of market value basing perception that the tenant will either move or die or (seldom) be evicted for rent arrears in due course bringing an immediate uplift in price of 25% plus whatever the retail price index has pushed prices up by.
All properties in the UK are sold with vacant possession unless stated otherwise in the contract. Pre-contract enquiries will elicit that there is a tenant in situ and what terms the tenancy is on and the purchaser will take over the tenancy on completion.
There is very little scope for concealing the tenancy status - it either comes to light at first contact, when valued, on pre contract enquiries, or in the contract itself and indeed as P. Pilcher says, any seller who successfully does manage to conceal the existance of a tenant is in very deep compensation water indeed to the buyer.
I myself have sold property subject to contract, only signing the contract and exchanging when I was absolutely positive the tenant had moved out and I had been able to access the property and change the locks.
19-09-2006, 22:06 PM
Davidjohnbutton, with the greatest respect, there have been some posts on here to the effect that if a vendor of a property containing a rent act tenant does not offer the property to the tenant first befiore offering it on the open market then a substantial fine can be levied. When this first came up about 12 months ago, even Paul F was suprised!
May I draw your attention to the latest thread where this matter is referred to (at length):http://www.landlordzone.co.uk/forums/showthread.php?t=3233Here a vendor appears to be belatedly trying to comply with the legislation and the rent act tenant is desperately trying to get legal assistance to force a sale at historic prices.
19-09-2006, 22:13 PM
PP.....the Right to First Refusal only applies in blocks of flats, and AFAIK only applies when the entire building is being sold.
19-09-2006, 22:51 PM
You may be absoloutely correct, Mr. Shed, but when this first surfaced a year or so ago, I think the posts referred to a terraced property - it's too late at night to spend ages trying to find it with the search engine....... and it may have been in the old forum.
19-09-2006, 22:55 PM
Well, when I was doing research for that thread you linked to, is where I found it stated that it was only for blocks of flats. I assume the technical definition would be a "single building containing more than one dwelling" :p. But, suffice to say, it is not for ANY rent act tenant, or any standard property containing them.
20-09-2006, 09:51 AM
It's a new day, I've got the search engine out and am happy to concede to MrShed's opinion. He did get it right.
For reference the thread is:http://www.landlordzone.co.uk/forums/showthread.php?t=495
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