Sitting Tenants and Rent Act 1977 Regulated Tenancies: What a Landlord Needs to Know

Every so often a landlord rings me with a version of the same story. They have inherited a flat, or bought a freehold, or finally looked closely at a tenancy that has been running quietly in the family for decades. The tenant has been there since the 1980s or earlier. The rent looks low. Nobody can find a tenancy agreement. And someone has used the words "sitting tenant".

If that is you, the first thing to say is: do not panic, and do not act yet. These tenancies are governed by different rules from the ones most landlords know, and the most expensive mistakes are made in the first few weeks by people applying modern assumptions to an old tenancy. In thirty-six years I have learned to treat these cases slowly and carefully. Here is what you need to know.

What a regulated tenancy is

Most lettings by private landlords that began before 15 January 1989 are regulated tenancies under the Rent Act 1977, whether the home was let furnished or unfurnished. After that date, almost all new private lettings became assured or assured shorthold tenancies instead. New regulated tenancies are rare, the main exception being where a landlord grants a fresh tenancy to someone who was already their regulated tenant.

You will hear several words for the same family of rights. A "protected" tenant holds the original contractual tenancy. A "statutory" tenant is someone who stays on, with full protection, after the contractual tenancy has ended. "Sitting tenant" is the everyday phrase for either. What matters is the start date and the history, so the first job is always to find the evidence: old rent books, letters, the rent register entry, and anything that shows when the tenancy began and who held it.

Security of tenure

A regulated tenant has strong protection. You cannot end the tenancy and recover the home simply because you want it back or want to sell. You need a possession order from the court, and the court can only make one on the specific grounds set out in the Rent Act.

Some of those grounds are discretionary, which means the court must also be satisfied that it is reasonable to make the order. Rent arrears and nuisance fall into this group. Some are mandatory but only apply in narrow circumstances that usually had to be set up when the tenancy began. Possession can also be sought where suitable alternative accommodation is available.

It is a criminal offence to evict a tenant without a court order. Court proceedings are reserved legal work, so possession cases go to a solicitor. My role is to get the facts and the paperwork straight before that conversation, so the solicitor's time is spent on the law and not on finding out what happened in 1987.

The fair rent system

Regulated tenancies sit inside their own rent system. Either the landlord or the tenant, or both together, can apply to have a "fair rent" registered for the home. The rent officer who decides it works for the Valuation Office Agency. Once a fair rent is registered, it is the maximum rent the landlord can lawfully charge.

A few points landlords are often surprised by:

• Scarcity is ignored. The rent officer must assume that demand for similar homes in the area does not greatly exceed supply. That is a large part of why registered rents in London sit well below open-market rents.
• Timing rules apply. A landlord can usually apply to re-register from one year and nine months after the date the last registration took effect. A tenant can usually apply after two years. A joint application can be made at any time, and an earlier application can be considered if the home has changed so much that the registered rent is no longer fair.
• Increases are capped. Where the home has not changed significantly, the new fair rent is limited by a formula linked to the Retail Price Index since the last registration, plus a small percentage. The rent officer's notice will show the figures.
• Either side can object. If the landlord or tenant disagrees with the rent officer's figure, the objection goes to the First-tier Tribunal (Property Chamber), which makes its own determination.

Applications are made on the prescribed form to the Valuation Office Agency's rent officer service. Check whether a rent is already registered before you do anything else, because the register entry tells you what you can charge today.

Succession

This is the area that catches families out most often. When a regulated tenant dies, the tenancy does not necessarily end.

• A surviving spouse or civil partner, or a partner who lived with the tenant as if married or in a civil partnership, who was living in the home immediately before the death, becomes the statutory tenant. That is a regulated tenancy, with the same protection and the same fair rent system.
• If there is no such partner, a member of the tenant's family who lived with them for the two years immediately before the death is entitled to an assured tenancy by succession instead. That is a different kind of tenancy, under the Housing Act 1988 rules.
• In limited circumstances a second succession can follow on the death of the first successor.

Who qualifies, and what kind of tenancy they take, depends on precise facts: who lived there, for how long, and in what relationship. Do not accept or reject a succession claim without advice.

Why these cases are a specialist niche

Regulated tenancies are now a small part of the rental market, which means fewer agents and fewer landlords have handled one. The rules are old, the paperwork is often missing, and the people involved are usually elderly tenants who have lived in the home for most of their lives. That combination needs patience, accuracy and kindness in equal measure.

The common mistakes I see are applying today's rent increase process to a regulated tenancy, serving the wrong notice, treating a successor as a new tenant, and neglecting repairs because "the rent is so low". The landlord's repairing duties for the structure, exterior and essential installations still apply, and a home in poor repair helps nobody.

Selling with a regulated tenant in place is possible, and some buyers specialise in it. The price reflects the tenancy, so good evidence about the tenancy, the registered rent and the condition of the home matters a great deal. I will not predict a figure or a timescale for any individual case; every one is different.

What I would do first

1. Find the start date and the evidence of it.
2. Check the rent register for a registered fair rent.
3. Write down who lives in the home now, and since when.
4. Look at the condition of the property and any outstanding repairs.
5. Do not serve any notice, raise the rent or discuss possession until you have taken advice.

This is general information, not legal advice. Court proceedings are reserved legal work and are handled by a solicitor.