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    • firsttimebuyer2017
    • By firsttimebuyer2017 19th May 17, 10:52 PM
    • 4Posts
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    firsttimebuyer2017
    Re: advice on exchange of contracts
    • #1
    • 19th May 17, 10:52 PM
    Re: advice on exchange of contracts 19th May 17 at 10:52 PM
    Hi,

    We are first time buyers (and will be owner occupiers) and really need advice. Had an offer accepted two months ago. Property currently has tenants in who go onto a rolling tenancy at the end of this month. We've been told the vendor will only serve notice when contracts are exchanged and this will be two months' notice. Completion will take place one week after the expiration of the two month period (as stated by their solicitor).

    We are concerned about committing the deposit and ending up in a protracted situation of waiting for the tenants to leave.

    What is a reasonable position here? Should contracts be exchanged with vacant possession?

    We have not yet undertaken the searches and are not in a chain. Neither is the vendor in a chain.

    Thanks in advance.
Page 1
    • Cakeguts
    • By Cakeguts 19th May 17, 11:11 PM
    • 2,276 Posts
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    Cakeguts
    • #2
    • 19th May 17, 11:11 PM
    • #2
    • 19th May 17, 11:11 PM
    Do not exchange contracts until the property is vacant. The tenants do not have to move out at the end of the 2 month notice they can wait until the landlord takes them to court this could take up to 6 months. If the tenants don't leave and you have to complete one week after exchange you will finish up buying a buy to let.
    • mrginge
    • By mrginge 19th May 17, 11:11 PM
    • 3,958 Posts
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    mrginge
    • #3
    • 19th May 17, 11:11 PM
    • #3
    • 19th May 17, 11:11 PM
    Find a different house.
    • G_M
    • By G_M 19th May 17, 11:20 PM
    • 39,208 Posts
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    G_M
    • #4
    • 19th May 17, 11:20 PM
    • #4
    • 19th May 17, 11:20 PM
    Do not exchange contracts until the property is vacant. The tenants do not have to move out at the end of the 2 month notice they can wait until the landlord takes them to court this could take up to 6 months. If the tenants don't leave and you have to complete one week after exchange you will finish up buying a buy to let.
    Originally posted by Cakeguts
    Cakeguts is 90% right.

    If the tenants don't leave after 2 months, which they may well not (they do not legally have to as the 2 months notice does not end their tenancy) then the seller will be in breach of contract, since they will not be giving you 'vacant possession'.

    You would refuse to pay or Complete because of this breach, and could sue the seller for your costs.

    So although the legal risk is actually the seller's, not yours, the inconvenience is certainly yours, as you'll not have bought or be able to occupy the property you had planned to.

    Not only would I strongly advise you not to Exchange till the tenants have left (and you've visited the property to check), I would advise you not to even spend money (on searches, survey, legal costs etc) till the tenants have left.

    Especially with this seller who clearly does not understand landlord/tenant law, ir the relaities of his situation.
    • Cakeguts
    • By Cakeguts 19th May 17, 11:26 PM
    • 2,276 Posts
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    Cakeguts
    • #5
    • 19th May 17, 11:26 PM
    • #5
    • 19th May 17, 11:26 PM
    The other problem with buying a house that has tenants is that you don't know if the house will be in the same condition when they leave as it was when you made the offer. If the tenants cause more damage than is covered by their deposit would you still want to buy the house at the same price as you offered?

    Now that you know all the negatives about this purchase you may wish to withdraw your offer and look for a different house?
    • firsttimebuyer2017
    • By firsttimebuyer2017 20th May 17, 8:17 AM
    • 4 Posts
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    firsttimebuyer2017
    • #6
    • 20th May 17, 8:17 AM
    • #6
    • 20th May 17, 8:17 AM
    Thanks for all input so far.

    Our concern is we do exchange and then get drawn into delays and stalling while the vendor continues to accrue rent from the tenant. I am mindful of all the feedback regarding the hassle and we definitely don't want to be involved in legal disputes.

    We had the offer accepted two months ago but were not informed the rolling tenancy ended this month.

    We had intended to commence searches after receiving outstanding certificates.

    Would it be considered reasonable to instruct our solicitor to tell them we will only exchange if vacant?

    Thank you.
    • csgohan4
    • By csgohan4 20th May 17, 8:23 AM
    • 3,366 Posts
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    csgohan4
    • #7
    • 20th May 17, 8:23 AM
    • #7
    • 20th May 17, 8:23 AM
    the Vendor wants their cake and eat it, that is rent until completion so they get as much money as possible.


    Now tell them your requirements which protects you as well, vacant on exchange Or no deal. Do not sink anymore money and tell solicitor to stop all work
    "It is prudent when shopping for something important, not to limit yourself to Pound land"
    • AdrianC
    • By AdrianC 20th May 17, 9:11 AM
    • 13,946 Posts
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    AdrianC
    • #8
    • 20th May 17, 9:11 AM
    • #8
    • 20th May 17, 9:11 AM
    We are first time buyers (and will be owner occupiers) and really need advice. Had an offer accepted two months ago. Property currently has tenants in who go onto a rolling tenancy at the end of this month.
    Originally posted by firsttimebuyer2017
    So the vendor couldn't have got the tenants out before that point anyway.

    We've been told the vendor will only serve notice when contracts are exchanged
    The vendor is an idiot, and your solicitor should tell his solicitor that this is not on.

    and this will be two months' notice.
    Yep.

    Completion will take place one week after the expiration of the two month period
    And if it can't, because the tenants haven't moved out...?

    Should contracts be exchanged with vacant possession?
    Abso-flippin'-lutely.
    • AnotherJoe
    • By AnotherJoe 20th May 17, 9:21 AM
    • 6,295 Posts
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    AnotherJoe
    • #9
    • 20th May 17, 9:21 AM
    • #9
    • 20th May 17, 9:21 AM
    The only reason you should contemplate this is that your expectation would be that the tenants didn't leave, the vendor was unable to get vacant posssesion and you got a big wodge of compensation.

    That might work as a gamble if you were in free or low cost accommodation such as parents, with no particular issues if you had to stay a few more months.

    More likely is that the tenants will leave on time and the place is somewhat of a mess and you've taken a big risk for no real gain amd a bunch of hassle, perhaps the tenants leave a month or two later than planned and you get minor compensation plus in the meantime the vendor has your deposit.

    Unfortunately you have found a vendor that's a greedy fool and you should just go look for another house.
    • eddddy
    • By eddddy 20th May 17, 10:54 AM
    • 4,468 Posts
    • 4,141 Thanks
    eddddy
    When the seller tells his solicitor that he plans to exchange contracts with the tenants still in occupation - I suspect the solicitor will 'put him straight'.


    As a starting point ask the EA to check with the seller... "Has the seller asked his solicitor's advice about exchanging contracts before the tenants have moved out? Because his solicitor will probably explain the high risk this causes for the seller."
    • firsttimebuyer2017
    • By firsttimebuyer2017 20th May 17, 11:34 AM
    • 4 Posts
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    firsttimebuyer2017
    Our solicitor has informed us of their terms, so l am assuming the vendor's solicitor has raised no objections.
    • AdrianC
    • By AdrianC 20th May 17, 11:39 AM
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    AdrianC
    Our solicitor has informed us of their terms, so l am assuming the vendor's solicitor has raised no objections.
    Originally posted by firsttimebuyer2017
    Then the solicitor is as big an idiot as his client...
    • KiKi
    • By KiKi 20th May 17, 12:26 PM
    • 4,881 Posts
    • 7,935 Thanks
    KiKi
    You're a first time buyer who (understandably) isn't aware of how these things work. So given your inexperienced position, I'd suggesting reading this: do not exchange until the tenants are out.

    Then read that ten more times!

    Once you've exchanged you're committed to buying the property. If the tenants don't leave then your vendor will have broken the contract, and depending on what happens next, you're either buying a buy-to-let and have the legal responsibility to manage the property (and legal costs of getting the tenant out) or you end up in a huge legal mess which is the seller's responsibility.

    It's just not worth it - just don't go there. It is MORE than perfectly reasonable to not exchange until the tenants are out. Moreover, it's the norm. Don't believe what the EA or the vendor's solicitor tells you - they just want the property sold.

    KiKi
    ' <-- See that? It's called an apostrophe. It does not mean "hey, look out, here comes an S".
    • Cakeguts
    • By Cakeguts 20th May 17, 1:36 PM
    • 2,276 Posts
    • 2,871 Thanks
    Cakeguts
    Thanks for all input so far.

    Our concern is we do exchange and then get drawn into delays and stalling while the vendor continues to accrue rent from the tenant. I am mindful of all the feedback regarding the hassle and we definitely don't want to be involved in legal disputes.

    We had the offer accepted two months ago but were not informed the rolling tenancy ended this month.

    We had intended to commence searches after receiving outstanding certificates.

    Would it be considered reasonable to instruct our solicitor to tell them we will only exchange if vacant?

    Thank you.
    Originally posted by firsttimebuyer2017
    Go back to the beginning and think this through now you have all this extra information.

    You go to view a house that has tenants living in it. This is not the same as viewing a house that is either vacant or owner occupied in that you are not guaranteed vacant possession which is what you need for your mortgage until the tenants have left. The tenants don't have to go at the end of their contract or at the end of their notice they could still be there in 6 months or how ever long it takes for the case to get to court.

    The fact that the tenants are still living there means that you don't really know what you are buying. You don't know what condition the house will be in when they leave. They don't own the house so they don't need to leave it in a good condition for you. It could have a lot of damage when they go so what do you do then? Lower your offer or buy it at the same price and pay for the damage to be repaired? For this to be a fair transaction you need to view the property after the tenants have left before you make the offer so already you have offered on something that might not be what you thought it was.

    The landlord knows that you are first time buyers they may be relying on that because they may assume that you don't know what you are doing which is why you have been given all the misleading information about rental contracts, notices and exchanging without the property being vacant first. This is not a good start to a property purchase because it makes it look as if the seller is going to try to cover up problems. (They are already doing this.)

    This cannot be the only property available in your area? It may appear to be a bit cheaper than many others but this could be because the seller anticipated selling to another buy to let investor which is why the tenants are still living there.

    You cannot buy this house at the moment because it is not vacant so it would be a really good idea to start to look for something else. Try to look for a house that is lived in by the owner or is vacant not one that has tenants still living there.
    Last edited by Cakeguts; 20-05-2017 at 1:38 PM.
    • NiaS90
    • By NiaS90 22nd May 17, 10:03 AM
    • 25 Posts
    • 4 Thanks
    NiaS90
    We are in a similar situation buying a house with tenants currently in the property. I have viewed the property the tenants are fully aware they are to leave after the 2 months ( not to say they will) I won't be exchanging contracts until i have viewed the property again. We have payed for search etc

    6th June there due to vacate & we're hoping to exchange and complete soon after.

    Fingers crossed it all goes to plan!
    • firsttimebuyer2017
    • By firsttimebuyer2017 22nd May 17, 7:09 PM
    • 4 Posts
    • 2 Thanks
    firsttimebuyer2017
    Hi all,

    We have instructed the solicitor that we will not exchange without vacant possession. We really want the sale to go through but the ambiguity over the exact terms of the tenancy (the EA still does not know how much notice they will be given) and also the risks you all point out have made up our minds.

    Hopefully they will resolve this and we can progress. I will post the final outcome.

    Thank you all for your valuable advice.
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