Buying a tenanted property

15th March 2022

Purchasing a tenanted property (one that has a tenant already in occupation), can be great.  No need to go looking for a tenant and possibly have an empty property for weeks if not months. No need to do vetting and need to wait to start getting a return on your investment.

But once you have made your purchase, what is the first thing you must do?

You should immediately notify the tenant of where to pay the rental monies. Otherwise they could continue to make payments to the previous landlord and then you have the issue of trying to recover your monies from them.  The tenant will pay where they have always paid, which is to the previous landlord, until notified otherwise.

If the property is let through an agent then the monies will continue to go to the agent. You can liaise with the agent about where they should forward any monies to.

The next thing you should do is serve a Section 48 Notice.  This is a Notice given to the tenant under section 48 of the Landlord & Tenant Act 1987 to provide them with an address at which notices can be served; this does not have to be a home address, it can be a work address, an agent address or any other address with the exception of a PO Box.

So why is a Section 48 Notice so important?

If you do not serve a Section 48 Notice then all claims for outstanding rent, any service charges and rent arrears cannot be enforced through the Court.  This means if you have served a notice designed to remove the tenant or instigate an eviction and the tenant does not leave, when you issue the proceedings the tenant will have a valid defence to the proceedings.  Furthermore, any notice that you have served may have already expired and you may have to restart the process again.

In our current times it is especially important to issue a Section 48 Notice. This is due to the length of time it can take to get cases into Court and before a judge.  At present the Court system is still trying to catch up with a backlog caused by the pandemic. As well as integrating the new cases being brought.  It is the experience of Burtons Solicitors that many cases are taking longer to reach a conclusion through the Court than it did pre-pandemic.

It is therefore imperative that you discuss any purchase with a tenant in-situ with your conveyancer before proceeding.  Our conveyancers work closely with the Landlord & Tenant department and can get you the answers and assistance you need.

Need more advice on a tenanted property?

For more legal advice on a tenanted property, use our online contact form here.