If you are a landlord or you are buying a property with a tenant, it is important to consider the issue of succession. Where a tenant is protected by the Rent Act 1977, the landlord may well be burdened with a tenant for a number of years. It is not uncommon for a buyer to acquire a freehold anticipating that on the death of the tenant the lease will terminate.
This may not be the case. Where there is ‘a Rent Act tenant’, there is a risk that the rules of succession come into play and a family member is entitled to succeed the tenancy on the death of the tenant. This will have a substantial effect on the value of the interest being purchased and must be considered.