Sell a House with Tenants in Situ – Even If They’re Not Paying Rent
Selling a house is never simple, and when tenants, especially non-paying ones, are still occupying the property, the situation becomes even more complex.
Whether you’re a landlord dealing with rental arrears, a tired investor seeking to exit the rental market, or someone who inherited a property with problematic tenants, the good news is that selling a house with tenants in situ is not only possible—it can often be done quickly and without legal headaches.
This comprehensive guide explores how to sell a house with sitting tenants, including those in rent arrears, while staying compliant with UK property and tenancy law. We also explain how specialist cash house buyers can help facilitate a fast, stress-free sale.
What Does “Tenants in Situ” Mean?
“Tenants in situ” refers to existing tenants legally occupying the property under a tenancy agreement at the time of sale. This includes both:
- Paying tenants who are in good standing, and
- Non-paying tenants, including those in arrears or breaching the agreement.
When a property is sold with tenants in situ, the buyer inherits the tenants and must honour the terms of the tenancy agreement.
Can You Legally Sell a House with Tenants in Situ?
Yes. UK law allows landlords to sell a tenanted property. Many landlords prefer this route when selling a buy-to-let investment, especially if they want to retain rental income during the selling process.
However, complications arise when tenants breach the agreement, especially when they’ve stopped paying rent.
In such cases, eviction is an option, but not always necessary. Many professional buyers will purchase properties with difficult or non-paying tenants in place.
Challenges of Selling with Non-Paying Tenants
Selling a property with rent arrears is possible, but there are several obstacles to be aware of:
Limited Buyer Pool
Most standard buyers, particularly homeowners, will not want to purchase a property with problem tenants, and many buy-to-let investors shy away from properties with nonpayment.
Depressed Valuation
A property with problem tenants will often be valued lower than one with vacant possession or reliable rent-paying tenants. The uncertainty around eviction costs, legal delays, and potential property damage can reduce buyer offers.
Legal and Compliance Issues
Tenants in situ have rights under the Housing Act 1988. This means the new owner inherits the tenant, and any effort to remove them must follow the correct legal procedure, such as serving a Section 8 or Section 21 notice (which may now be restricted).
Selling Options When Tenants Are in Arrears
There are several avenues landlords can pursue to sell a tenanted property where rent isn’t being paid:
Serve Notice and Wait for Eviction (if time permits)
If you’re not in a rush to sell, you can serve a Section 8 Notice citing rent arrears (usually after 2 months unpaid) and apply to the court for possession.
This process can take several months and may involve legal costs, especially if the tenant contests the notice.
Pros:
- You can sell the property vacant, which may increase the value.
- Buyers will not inherit the tenancy.
Cons:
- Time-consuming and stressful.
- No rental income during the eviction process.
- Possible property damage if the relationship turns sour.
Sell the Property to Another Landlord
Some landlords are willing to buy properties with tenants in situ, even in arrears, as part of a buy-and-hold investment strategy. These investors typically buy at a discount to offset the risk of nonpayment or legal action.
Sell to a Cash House Buyer
The fastest and least complicated route is to sell to a professional cash house buyer. These firms specialise in buying problematic properties quickly—whether they have sitting tenants, need significant repairs, or are entangled in legal issues.
Benefits:
- Sale can be completed in as little as 7–14 days.
- No need to evict tenants first.
- No estate agent fees or lengthy marketing.
- Guaranteed sale with minimal paperwork.
How the Sale Process Works with Tenants in Situ
Here’s a step-by-step breakdown of how to sell a house with tenants, especially if they’re not paying rent:
Step 1: Gather Tenancy Documents
The first step is to prepare a file of the following:
- Signed tenancy agreement
- Deposit protection scheme (DPS) documentation
- Gas safety certificate
- Electrical installation condition report (EICR)
- Energy performance certificate (EPC)
- Rent statement and arrears log
- Any notices served (e.g., Section 8 or 21)
This information helps the buyer understand the tenant’s legal status and viability.
Step 2: Disclose Tenant Situation
You must disclose whether the tenant is in arrears, the length and extent of those arrears, and any previous efforts to collect rent or evict. Transparency avoids legal complications and helps identify the right buyer.
Step 3: Find a Suitable Buyer
Depending on your urgency, you can:
- Market to other landlords through specialist agents
- Approach cash property buying companies
- List the property with a “tenants in situ” disclaimer (not ideal if the tenant is uncooperative)
Step 4: Negotiate a Price Reflecting Risk
Buyers will likely offer below-market value to account for the risk of:
- Potential court eviction
- Legal fees
- Time delays
- Loss of rental income
However, this is often worth it if you’re struggling financially or emotionally with the tenant.
Step 5: Complete the Sale
Once terms are agreed upon, a solicitor will handle the legal transfer. If the buyer uses cash (no mortgage), the sale can be completed quickly, even with the tenant still in place.
What If the Tenant Refuses Access?
Under the Landlord and Tenant Act 1985, tenants have the right to quiet enjoyment, meaning they can refuse viewings or valuations. If the tenant is uncooperative, this can delay or derail traditional sales.
However, cash buyers typically don’t need access for multiple viewings—they may make an offer based on limited inspection or desktop valuation. This makes them ideal for situations involving hostile or absent tenants.
Does the Buyer Inherit the Arrears?
No. Rent arrears are a civil debt between the landlord and the tenant. You don’t transfer the debt to the buyer when you sell the property. If you want to recover the arrears, at your discretion, you must pursue legal action before or after the sale.
However, in most cases, landlords prefer to walk away clean and accept a discounted sale price rather than deal with costly litigation.
Why Landlords Choose to Sell with Tenants in Situ
Selling a house with non-paying tenants may seem counterintuitive, but many landlords find it is the simplest way to exit a stressful situation:
- Avoid lengthy court battles
- Prevent further financial losses
- Free up cash tied to the property
- Shift responsibility to a buyer better equipped to handle problem tenants
Is the Sale Legal Without Evicting the Tenants?
Yes. The transaction is legal if the buyer is fully informed and accepts the tenancy. Under the “sale subject to tenancy principle,” the buyer becomes the new landlord on completion.
However, the tenancy agreement, rent deposit, and any obligations (e.g., licensing under HMO rules) will also transfer.
How Much Will You Lose on the Sale?
It’s realistic to expect a discount of 10% to 30% below market value, depending on:
- Extent of rent arrears
- Type and length of tenancy (AST, periodic, etc.)
- Location and market demand
- Property condition
- Legal notices served
While this seems like a loss, it’s often a net gain compared to prolonged vacancies, legal fees, and the mental toll of dealing with a nightmare tenant.
If your tenant is obstructive, aggressive, or hasn’t paid rent in months, a reliable cash buyer is the best way out.
Final Thoughts
Selling a house with tenants in situ—even those who aren’t paying rent—is possible in the UK. While it may seem daunting, there are professional solutions that allow you to:
- Exit the rental market without legal conflict
- Sell quickly without court proceedings
- Avoid further arrears or damage
- Regain financial control and peace of mind
If you’ve had enough unpaid rent and tenant drama, now is the time to act. A fast property sale to a reputable cash buyer can free you from the burden—no evictions, delays, or hassle.
🔗 Useful External Links
- GOV.UK – Selling your home
https://www.gov.uk/selling-your-home
Official UK government guidance on legal steps and responsibilities when selling property. - Citizens Advice – If you’re selling your home
https://www.citizensadvice.org.uk/housing/owning-a-home/selling-your-home/
Explains your rights, what to consider, and the financial implications of selling. - The Property Ombudsman (TPO)
https://www.tpos.co.uk
Check if a cash buying company is a member of this redress scheme. Adds trust and transparency. - MoneyHelper – Problems paying your mortgage
https://www.moneyhelper.org.uk/en/homes/buying-a-home/struggling-to-pay-your-mortgage
Government-backed advice service for homeowners dealing with financial hardship.
National Association of Property Buyers (NAPB)
https://www.napb.co.uk
A professional body for reputable cash house buying companies in the UK.
Frequently Asked Questions (FAQs)
Can I sell my rental property if the tenant hasn’t paid rent?
Yes, you can sell with the tenant in situ. You must inform the buyer of the rent arrears; the sale is often discounted to reflect this.
Will I still be liable for rent arrears after the sale?
No. You will not be liable to the buyer for arrears, but you may pursue the tenant privately if desired.
Do I need to evict the tenant first?
Not necessarily. If you’re selling to a cash buyer or landlord-investor, they may prefer the tenant remain in place—eviction is their responsibility after purchase.
Can I get the full market value for the property?
It’s unlikely that the tenant isn’t paying rent. The buyer will factor in risk and costs, so expect a reduced offer price.
How long does the process take?
A professional cash buyer can complete the sale in as little as 7 to 14 days, even with non-paying tenants.
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