Buying a Protected Tenancy properity

[Rental]

Hi,

I’m looking for some advice; I’m looking at buying a house that has a sitting protected tenancy at auction. Guide value is in the region of £30,000 with a monthly income of just under £200. I need to know the following:-

· When does a protected tenancy end?, for looking at several website’s, I’m getting different information. One says when the current tenant leaves (or passes away) the protected tenancy ends, the other implies, if dependents live in the house, the protected tenancy can stay in place and pass to them.

Open market value for the property would be in the region of £70,000 and rental value £450?

I’ve been a landlord previously (10 years ago, which I sold), so this would be my first rental since then.

Thanks in advance for any help.

[LLAW96]

What you are dealing with here is a rent act protected/regulated tenant, and the reason why such a property sells at a discount is due to the security of tenure and rent control that such a tenant enjoys. The issue of succession is covered by the Rent Act 1977 as amended by the Housing Act 1988. On the death of the tenant the property will pass to the tenants spouse or their partner if they were living together as man and wife. The successor tenant will be a statutory rent act tenant provided that they were living with the previous tenant at the date of death. If no such person exists then a member of the tenants family can succeed to an assured tenancy provided that they had lived with the tenant for two years prior to their death. Please also note that in certain circumstances there can be a second succession. So where does that leave you? Check whether there has already been a succession, if not whether it will be a spouse/partner or family member who will succeed. Remember you are buying the property at a discount for a reason, but eventually it should give you a nice return if you can wait. Alternatively you could ask the sitting tenant if they would take a bung to move on, you never know unless you ask.

Hope this helps

[Rental]

What you are dealing with here is a rent act protected/regulated tenant, and the reason why such a property sells at a discount is due to the security of tenure and rent control that such a tenant enjoys. The issue of succession is covered by the Rent Act 1977 as amended by the Housing Act 1988. On the death of the tenant the property will pass to the tenants spouse or their partner if they were living together as man and wife. The successor tenant will be a statutory rent act tenant provided that they were living with the previous tenant at the date of death. If no such person exists then a member of the tenants family can succeed to an assured tenancy provided that they had lived with the tenant for two years prior to their death. Please also note that in certain circumstances there can be a second succession. So where does that leave you? Check whether there has already been a succession, if not whether it will be a spouse/partner or family member who will succeed. Remember you are buying the property at a discount for a reason, but eventually it should give you a nice return if you can wait. Alternatively you could ask the sitting tenant if they would take a bung to move on, you never know unless you ask.

Hope this helps

Thank you LAW for the very detailed response. I'll clearly need to do further research before deciding if i should consider buying this properity.

[Mortitia]

Protected or regulated tenancies look very appealing in auction catalogues but the sting is that the existing landlord cannot remove the tenant (and I bet he has offered a cash incentive for the tenant to go) so he/she is selling up for whatever reason. You won't be able to remove the tenant either so either buy and wait for tenant to leave or die (if elderly).

The rent can be reviewed bi-annually by going to the fair rents tribunal but increasese are never more than 3%.

Mortitia