This is a question to the blog clinic from Gloria who is a landlord.
I own a property which is converted into five flats. Four of the flats have tenants on Assured Shorthold Tenancy Agreements but the fifth tenant is a secure tenant.
I wish to sell the property and willing to wait for the ASTA tenants to complete their term but where do I stand with regard the secure tenant if I can’t find a buyer to accept them?
Answer
It is extremely hard to evict a secure tenant. Assuming they are not in arrears of rent (when you can evict based on rent arrears) there are really only four options available to you:
1 Try to buy them out.
However most secure tenants are aware that they would not find any alternative accommodation at the same low level of rent and will be unwilling to do this.
2 Wait until they die.
However this could be many years. Plus if they are married or have family members living with them, they could acquire the tenancy under the sucession rules.
3 Provide ‘suitable alternative accommodation’.
This is a good option but you have to follow the rules. The alternative property offered has to be roughly equivalent to the property they have now and an equivalent tenancy type.
So saying that there are lots of nice properties to let in the paper won’t do as they will be assured shorthold tenancies. If they move to any property where you are the landlord this will automatically be another secure tenancy.
In many cases this will be the only real option if you want to recover possession of a property to sell or develop it. If a tenant unreasonably refuses suitable alternative accommodation a Judge will usually be willing to make an order for possession as this will not make the tenant homeless.
However get legal advice before proceeding as there are a lot of things to consider when choosing the ‘suitable property’ plus there is a long list of case law you need to take into account.
4. Find a company which specialises in buying hard to sell property
There are two companies that I am aware of:
No doubt there are others.
However if you sell with a sitting secure tenant you will inevitably get a lower price that selling the property with vacant possession.
Conclusion
If you have a large portfolio and are able to offer the tenant suitable alternative accommodation, this is probably the best solution. Otherwise it may mean taking a hit in the price by using a professional property purchasing company.
Hello
When you say Secure tenancy, I assume you mean Assured tenancy and not a AST.
Suitable alternative accommodation for a “Protected tenancy” Regulated Tenants who moved in before 15/01/1989 is only a discretionary cases for possession order.
I was advised sometime ago by 2 different solicitor that Suitable alternative accommodation for regulated tenants was amended by http://www.legislation.gov.uk/ukpga/1988/50/section/34?view=plain
Suitable alternative accommodation only applies to the Original landlord LL of a Rent act tenant “the 1st landlord” I have a regulated tenancy myself and the property I live in has been sold twice, my 2nd LL tried Suitable alternative accommodation, LL’s solicitor advised they would loose in court.
Stuart.
Yes, it is a discretionary ground, but one which is more likely to be approved by the Judge as the tenants will not be made homeless.
I assumed that this lady was the original landlord but you may well be right about landlords by purchase. Any landlords seeking to evict by this method MUST get legal advice before doing anything.
Hello Tessa.
I Moved in 1980.
My 1st LL Sold the property with me there as a Regulated Tenant.
My 2nd LL by purchase, sold up when he could Not use Suitable alternative accommodation.
My 3rd LL by purchase, Not happy with Fair rent registered but has just left my alone.
Yes, Any LL should seek legal advice.
Especially when buying a property with a Regulated Tenant in place and Regulated tenants should seek legal advice too.
Stuart.