Auction Finance Limited, a Manchester firm that provides finance for property professionals purchasing at auction, says that it has witnessed several instances of investors running into difficulties because they were unaware that their new property came with a sitting tenant.
Scott Hendry, new business manager at Auction Finance Limited, said: "There are still a significant number of properties with regulated tenancies turning up in the auction catalogues, so it is very important to understand the type of agreement that is in place before you bid on a tenanted property."
Most private properties are now leased under an Assured Short-hold Tenancy (AST) Agreement. A bidder who acquires a property with an AST will benefit from an instant rental return and, if they require access to the property for their own occupation or to undertake large scale refurbishments, they are entitled to take possession when the agreement comes to an end. However, if the tenant was in residence prior to 15th January 1989 they may be on a Regulated agreement.
