Are you a landlord buying a property with a sitting tenant?

If a landlord purchases a property with a sitting tenant, it is essential that they serve the tenant with two important notices: (1) Section 3 (Landlord and Tenant Act 1985) Notice and (2) Section 48 (Landlord and Tenant Act 1987) Notice. We take a look at both in turn: Section 3 Notice Section 3 of the Landlord and Tenant Act 1985 (hereafter referred to as LTA 1985) refers to a landlord’s duty to notify the tenant that they are the new landlord, having taken over from the previous landlord, usually through purchase of the property. In addition, Section 3 of the LTA 1985 places an obligation on the new landlord to provide their address. It is important to note that this must be the landlord’s actual address and not just an address for service of documents. It is necessary to provide such information “not later than the next day on which rent is payable under the tenancy or, if that is within two months of the assignment, the end of that period of two months” (Section 3(1) LTA 1985) If a Section 3 Notice is not served, both the old and new landlord can be held jointly and severally liable for any breaches of the tenancy agreement, such as disrepair. The old landlord can protect themselves by providing their own Notice (of which would detail the new landlord’s name and address). Section 3(3) LTA 1985 provides that failure to adhere to the obligations contained in Section 3, the new landlord commits a summary offence and liable on conviction to a fine up to £2500. In summary, failure to provide a Section 3 Notice to your tenants can have criminal and civil implications. Section 48 Notice Section 48 LTA 1987 provides that a tenant must, by notice, be provided with an address where notices may be served on the landlord. The address must be in England and Wales. Normally, this is clarified and provided in the tenancy agreement. However, a Section 48 Notice may be necessary if a landlord has purchased a property with a sitting tenant or a landlord has changed addresses during the tenancy. Additionally, a tenant can refuse to sign a new tenancy agreement and therefore a Section 48 Notice may be necessary. In contrast to a Section 3 Notice, a Section 48 Notice does not need to contain the landlord’s own address but simply an address where notices can be served – often this is a managing agent’s address. A landlord cannot demand rent from a Tenant if the landlord has failed to provide such information; however, note all rent becomes lawfully due immediately after service of a Section 48 Notice. This can have implications if a landlord pursues possession proceedings. If a Section 48 notice has not been served, the proceedings may fail (which, in effect, is an additional cost to the landlord). It is important that both a Section 3 Notice and a Section 48 Notice are provided to the tenant as soon as possible. Serving notice is relatively straightforward and can prevent big implications in the future (as indicated throughout); we can assist with drafting such notice for a fixed fee. At NewBold Solicitors, we offer a free 15-minute telephone consultation to discuss your matter in more detail. If you would like to discuss your case with us. Please call our dedicated team on 0330 123 1131 or visit our Landlord or Tenant Services pages for further information.   Jake Wesson - Graduate Solicitor