What Should You Look For When Buying A Property With Tenant In Situ?


Tenant in situ can be a great proposition if everything falls in place as it should buying a property.

More often than not, this wouldn’t be the case.

Investors tend to ignore few things within the completion process with Tenant in situ
which hits them hard couple of months into inherited tenancy.


This post details out the bare minimum things that you need to keep your eye on
if you are purchasing a property with tenant in situ.

Here we go then:

1) Assured Shorthold Tenancy (AST)

While it is possible for the tenancy to be transferred across to you as part of conveyancing, advise is to always create a new tenancy agreement with your letting’s management company.


If you are looking to transfer the tenancy agreement, you may not be able to evict the tenant or serve Section notices to evict the tenant at later point in time.

Needless to say:

As part of your revised rental agreement, you ensure to

  • Credit check the tenant
  • Review any rent arrears
  • Verify any guarantors


You as a buyer must ensure that the revised rental agreement can be signed by the tenant along with the exchange/completion of the property.

This is simply because you assume ownership of property as soon as it is exchanged and completed and rental agreement has to be active from day one of your ownership.

2) Deposit Protection

Deposit protection is one of the legal responsibilities of landlord when you rent out a property.


Here you have a situation where tenant has his existing deposit protection secured elsewhere with current landlord and you will be requesting a new deposit protection as part of rental agreement.


This will have to be worked out with solicitors and the seller to ensure tenant is not impacted and is happy with the arrangement.

A simple transaction can be for seller to refund the deposit to the buyer as part of the transaction and the buyer secures the deposit separately, of course with agreement from solicitors.

3) Inventory Check

Inventory check is the most ignored process when securing a property with tenant in situ.

Here is the deal:

If you do not have an inventory check done buying a property with tenant in situ, you are at the mercy of tenant to tell you what is, and is not part of the inventory when he/she
moves out of the house.

4) Viewing Before Exchange

Your last opportunity to back off from the property deal should you sense something wrong is before exchange of the property.

With tenant in situ, you may have to consider the scenario of condition of property when you viewed it before offering on it, versus condition of property during exchange.

You want to ensure that the property is safe for the tenant to live and does not have any health and safety related issues within the property from a landlord perspective.


Given someone is living in the property, you would want to ensure everything has remained the same without any damage during the conveyancing period.

Even better, if you can exchange and complete on the same day to avoid any risk of change in state of property.

That’s certainly my preference to complete exchange and completion on same day with tenant in situ.



5) Off Contract Agreements With Tenant In Situ

From time to time you will come across tenants and landlords who agree terms verbally and are not part of tenancy agreement.

Yes, its not a good practise but not something one can avoid completely.

In your own best interest, verify any off-contract agreements that tenant and seller may have agreed which are not mentioned to solicitors.


A classic case which we came across at Limitless Monks buying one such property was when the seller said the rent was £450 and the tenant informed my letting agent £425 within the due-diligence process.

There was a £25 cash rental that was in place as a top-up that the seller received over and above the housing allowance the tenant used to get.

6) Contents Within Property

You sure want to have an inventory or account of the belongings of the seller versus the ones that belongs to tenant.

Inventory report may state the condition of the belongings, but you will need a list of who owns which ones and agreed with the tenant in situ.


You would want to ensure all such contents are insured at the time of exchange on the property.

7) Know More About Your Tenant In Situ

One of the key things you want to know from the tenant in situ is what are his/her plans to live within the property.

Here is the deal:

It’s not worth the effort or risk if the tenant only plans to stay say for next 3 months. You might as well request the seller to handover the property with vacant possession.

It’s a buyer’s perspective totally.

Understanding following about the tenant gives you an idea of what you want to and don’t want to spend your money on, improving the value of the property for the tenant.

  • How long tenant intends to live within the area/property
  • Has the tenant been paying the rents without any issues?
  • How long has the rent remained and if there is any scope of increase or subsidise
  • How long has tenant been living in the property
  • Would tenant be OK to personalise the property with a view to add value
  • Tenants likes and dislikes about the area and the property

You get the picture….

8) Repairs Done Last Year+

Irrespective of condition of the property, you may want to understand the repairs that have been actioned on the property in the last year or so and if there were any that have been occurring repetitively within the tenancy.


That pretty much is going to tell you first hand on the estimated costs you are going to incur as part of tenancy in the first few months or the first year.


Tenant in situ whilst can be a good proposition to get the cash flow from day one of property purchase, it isn’t going to be one if you don’t dig into the full history of the tenancy.

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