I've been trying to advise an in-law about a house purchase they are currently involved in as they seem to be unaware of the RPZ legislation.
One of the family members is purchasing the house from their siblings.
Currently there is a registered tenancy to a nephew of theirs on the house. The nephew will be vacating the property on completion of the sale. The nephew has the property at well below the market rent for the area which is in an RPZ.
The new potential owner intended to increase the rent to a market rate until I pointed out that the existing tenancy would prevent this. They want all of this above board and legal. The sale may fall through because of this issue.
The house had already been significantly renovated in recent years so it would be costly to do so again to nullify the rpz cap.
Am I correct in my understanding above or is there some exemption for the sale of a property to family members nullifying the previous tenancy?