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    • Geek1337
    • By Geek1337 19th Apr 17, 6:09 PM
    • 15Posts
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    Geek1337
    Buying House with Tenants
    • #1
    • 19th Apr 17, 6:09 PM
    Buying House with Tenants 19th Apr 17 at 6:09 PM
    Hey,

    I've recently had an offer accepted on a property which I hope will soon become my first home.

    The property was listed as 'ideal for an investor' as there is a tenant currently living in the property who has been there for the past 5 years and was hoping to stay living there. Despite this the Landlord was happy to accept my offer as a first time buyer hoping to live in the property.

    When I viewed the property, the tenant seemed unhappy that a first time buyer was being shown around the property as this means they will need to move out. I have been told that they will be given 2 months notice and following this the property will be ours.

    I am just wondering if anyone has any advice for this situation? Is there anything we can do to ensure the tenant moves out at the end of the notice period? Or anything I need to do to cover myself in case of this scenario?

    I'm also wondering what will happen to the deposit the tenant has paid and what will happen about any damage caused to the property. Is there any assurance I need to get from the EA when signing the documents?

    Thanks.
Page 1
    • marliepanda
    • By marliepanda 19th Apr 17, 6:13 PM
    • 4,563 Posts
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    marliepanda
    • #2
    • 19th Apr 17, 6:13 PM
    • #2
    • 19th Apr 17, 6:13 PM
    There is no guarantee or requirement for the tenant to move out after two months. YOU are in no position to 'ensure' they leave.

    Do not exchange until the tenant is out.
    Survey Earnings 2017 - £163
    • Penitent
    • By Penitent 19th Apr 17, 6:15 PM
    • 1,276 Posts
    • 3,791 Thanks
    Penitent
    • #3
    • 19th Apr 17, 6:15 PM
    • #3
    • 19th Apr 17, 6:15 PM
    My advice would be not to spend anything until the tenant is gone and you've re-viewed the property.
    • Mojisola
    • By Mojisola 19th Apr 17, 6:18 PM
    • 27,830 Posts
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    Mojisola
    • #4
    • 19th Apr 17, 6:18 PM
    • #4
    • 19th Apr 17, 6:18 PM
    Don't stop looking at other properties - you may be waiting a long time for this one if the tenants don't want to leave.
    • KiKi
    • By KiKi 19th Apr 17, 6:20 PM
    • 4,898 Posts
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    KiKi
    • #5
    • 19th Apr 17, 6:20 PM
    • #5
    • 19th Apr 17, 6:20 PM
    The tenant may be given 2 months' notice to leave, but they don't have to. If they choose not to then the Landlord can get a court order to evict them. The whole process can take months. In short (and this is very very important, just in case it's not clear!) do not exchange contracts under any circumstances until the tenant is evicted and the house is empty. (If you do, you will be a landlord, with all the responsibilities that come with it, and may have to go to court to evict the tenant yourself, and in the meantime be liable for the property, and incur all the legal costs. Just don't go there.)

    In any case, your mortgage provider may well not lend to you unless the house is untenanted. Don't believe your EA or the seller if they 'guarantee' you the tenant will be out. They can't guarantee it.
    Check it yourself, and refuse to exchange without proof!
    ' <-- See that? It's called an apostrophe. It does not mean "hey, look out, here comes an S".
    • theartfullodger
    • By theartfullodger 19th Apr 17, 6:20 PM
    • 8,782 Posts
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    theartfullodger
    • #6
    • 19th Apr 17, 6:20 PM
    • #6
    • 19th Apr 17, 6:20 PM
    Ask tenant (not owner, not agent, not solicitor..) when they 1st moved in: If early enough there might be no realistic way of getting them evicted (if they have Rent Act tenancy).

    Even AST evictions, if tenant digs in heels, can take 40 weeks + - see
    http://www.landlordzone.co.uk/forums/showthread.php?75530-Time-to-repossess-statistics
    • Cakeguts
    • By Cakeguts 19th Apr 17, 6:22 PM
    • 2,575 Posts
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    Cakeguts
    • #7
    • 19th Apr 17, 6:22 PM
    • #7
    • 19th Apr 17, 6:22 PM
    The landlord gives the tenants two months notice that he is intending to end the tenancy. The tenants do not have to leave at the end of the two months. If they don't leave the landlord has to go to court to get a possession order to make the tenants leave. If the tenants still don't leave the landlord has to instruct bailiffs to make the tenants leave. It can take several months after the 2 months notice for the tenants to finally leave the property.

    You need to leave exchange of contracts until the house is vacant because if you don't do this you could buy a house with the tenants still living there. No one will know what condition the tenants are going to leave the property in until they have left. If they do a lot of damage to the property when they leave will you still want to buy it at the same price?

    The reason why this property was advertised as "ideal for an investor" is because the simplest change of ownership would happen if another investor bought it and kept the tenants. There is more uncertainty for you because you don't know how long it will take for the tenants to leave and you don't know what condition they will leave the property in.
    • marliepanda
    • By marliepanda 19th Apr 17, 6:26 PM
    • 4,563 Posts
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    marliepanda
    • #8
    • 19th Apr 17, 6:26 PM
    • #8
    • 19th Apr 17, 6:26 PM

    The reason why this property was advertised as "ideal for an investor" is because the simplest change of ownership would happen if another investor bought it and kept the tenants. There is more uncertainty for you because you don't know how long it will take for the tenants to leave and you don't know what condition they will leave the property in.
    Originally posted by Cakeguts
    Also I imagine (from experience) the landlord was like 'please let me show people around your house, I'm only going to sell it to an investor so you won't need to move!'
    Survey Earnings 2017 - £163
    • eddddy
    • By eddddy 19th Apr 17, 6:27 PM
    • 4,832 Posts
    • 4,468 Thanks
    eddddy
    • #9
    • 19th Apr 17, 6:27 PM
    • #9
    • 19th Apr 17, 6:27 PM
    The tenants are not really your problem - they will be gone before you own the property.

    Some people will say...

    1. Don't spend any money on searches, mortgage applications, legal stuff until the tenants are out

    or
    2. Don't exchange contracts until the tenants are out.

    or
    3. Don't complete until the tenants are out.

    As you're a first time buyer, go for option 1 or 2.

    But you might get into a catch 22 situation with option 1....
    - You won't spend any money until the tenants are evicted.
    - But the owner won't evict the tenants until you show commitment by spending some money.


    If the tenants decide to be difficult, it could take 6 months for the current owner to evict them. (Or they might agree to move out within a week.)
    • Cakeguts
    • By Cakeguts 19th Apr 17, 6:37 PM
    • 2,575 Posts
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    Cakeguts
    I would suggest that you look for a different house. If the landlord had wanted to sell this house for someone to live in they would have made sure that the tenant had gone before they put the house on the market. As it is you have no idea when it will become vacant and no idea what sort of condition it will be in when it is vacant. You also don't yet have any idea what sort of tenancy the tenants have. You will have to get a solicitor to find out from the sellers solicitor what kind of tenancy the tenants have. Some very old tenancies and some newer ones mean that you can't just ask tenants to leave and they have the right to carry on living there so you need to know before you do anything else that these tenants can be made to move out. This means spending money on the house before you even know if you will be able to get it vacated.
    • Geek1337
    • By Geek1337 19th Apr 17, 6:56 PM
    • 15 Posts
    • 2 Thanks
    Geek1337
    The landlord gives the tenants two months notice that he is intending to end the tenancy. The tenants do not have to leave at the end of the two months. If they don't leave the landlord has to go to court to get a possession order to make the tenants leave. If the tenants still don't leave the landlord has to instruct bailiffs to make the tenants leave. It can take several months after the 2 months notice for the tenants to finally leave the property.

    You need to leave exchange of contracts until the house is vacant because if you don't do this you could buy a house with the tenants still living there. No one will know what condition the tenants are going to leave the property in until they have left. If they do a lot of damage to the property when they leave will you still want to buy it at the same price?

    The reason why this property was advertised as "ideal for an investor" is because the simplest change of ownership would happen if another investor bought it and kept the tenants. There is more uncertainty for you because you don't know how long it will take for the tenants to leave and you don't know what condition they will leave the property in.
    Originally posted by Cakeguts

    When we viewed the property the first time, the tenants were present. They made it seem like they were shocked that first time buyers were being allowed to view the property. The EA mentioned that the Landlord mentioned he 'preferred' to sell to an investor but would not rule out a first time buyer. When this was mentioned to the tenant, they said they'd need to know because they'd need to find somewhere else to live.

    It did seem like the tenants understood the situation but as you said, if they refuse to leave it will make it very difficult. Buying my first house is a scary enough thought as it is!
    • Geek1337
    • By Geek1337 19th Apr 17, 7:00 PM
    • 15 Posts
    • 2 Thanks
    Geek1337
    The tenants are not really your problem - they will be gone before you own the property.

    Some people will say...

    1. Don't spend any money on searches, mortgage applications, legal stuff until the tenants are out

    or
    2. Don't exchange contracts until the tenants are out.

    or
    3. Don't complete until the tenants are out.

    As you're a first time buyer, go for option 1 or 2.

    But you might get into a catch 22 situation with option 1....
    - You won't spend any money until the tenants are evicted.
    - But the owner won't evict the tenants until you show commitment by spending some money.


    If the tenants decide to be difficult, it could take 6 months for the current owner to evict them. (Or they might agree to move out within a week.)
    Originally posted by eddddy

    This is exactly how I feel about the situation! There's honestly no way to know how the tenants will react but I don't want to risk losing the house because the seller doesn't think I'm serious.

    What would happen if I informed the EA that I didn't want to exchange contracts until the tenants have moved out? Would this upset the seller or cause delays when they do leave?
    • marliepanda
    • By marliepanda 19th Apr 17, 7:01 PM
    • 4,563 Posts
    • 9,182 Thanks
    marliepanda
    When we viewed the property the first time, the tenants were present. They made it seem like they were shocked that first time buyers were being allowed to view the property. The EA mentioned that the Landlord mentioned he 'preferred' to sell to an investor but would not rule out a first time buyer. When this was mentioned to the tenant, they said they'd need to know because they'd need to find somewhere else to live.

    It did seem like the tenants understood the situation but as you said, if they refuse to leave it will make it very difficult. Buying my first house is a scary enough thought as it is!
    Originally posted by Geek1337
    They were probably told that they wouldnt have to move, they were shocked that in fact the landlord would be more interested in money than them.

    Considering he is quite happy to keep renting to them right up until he sells shows that hes only bothered about money.

    The fact he is only bothered about money doesnt bode well for selling, as if someone comes along with a slightly higher offer, hes going to have no loyalty to you the same as he has no loyalty to his tenants.

    Again, do not exchange until you have seen an empty property.

    If the landlord isnt happy with this, move on.
    Survey Earnings 2017 - £163
    • marliepanda
    • By marliepanda 19th Apr 17, 7:03 PM
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    marliepanda
    This is exactly how I feel about the situation! There's honestly no way to know how the tenants will react but I don't want to risk losing the house because the seller doesn't think I'm serious.

    What would happen if I informed the EA that I didn't want to exchange contracts until the tenants have moved out? Would this upset the seller or cause delays when they do leave?
    Originally posted by Geek1337
    A sensible person would say 'thats wise! In their shoes, I would do the same.'

    Someone who is only bothered about cash will happily move along to the next person.

    Again, do not even consider exchanging until the tenants are out. This cannot be emphasised enough.
    Survey Earnings 2017 - £163
    • Penitent
    • By Penitent 19th Apr 17, 7:05 PM
    • 1,276 Posts
    • 3,791 Thanks
    Penitent
    It wouldn't be in the seller's interest to exchange with the tenant in situ. If the tenant didn't move out by completion, he wouldn't be giving you vacant possession and wouldn't be able to complete, so he'd become liable for any costs you incur.
    • Geek1337
    • By Geek1337 19th Apr 17, 7:10 PM
    • 15 Posts
    • 2 Thanks
    Geek1337
    They were probably told that they wouldnt have to move, they were shocked that in fact the landlord would be more interested in money than them.

    Considering he is quite happy to keep renting to them right up until he sells shows that hes only bothered about money.

    The fact he is only bothered about money doesnt bode well for selling, as if someone comes along with a slightly higher offer, hes going to have no loyalty to you the same as he has no loyalty to his tenants.

    Again, do not exchange until you have seen an empty property.

    If the landlord isnt happy with this, move on.
    Originally posted by marliepanda
    I'm definitely going to take your advice, I don't feel comfortable exchanging until the tenants have moved out. I'll discuss this will the EA tomorrow
    • AnotherJoe
    • By AnotherJoe 19th Apr 17, 7:18 PM
    • 6,912 Posts
    • 7,357 Thanks
    AnotherJoe
    And when you do, bear in mind your mortgage company will insist upon vacant possession anyway so don't be fobbed off if they tell you to proceed and it will all be OK, you could spend several hundred pounds find it all,drags on and goes nowhere.

    Picking up from another poster, the fact the LL hasn't given tenants notice says LL is either greedy, unrealistic or hapless none of which bode well for this sale, this may not be the property for you.
    • 3card
    • By 3card 19th Apr 17, 7:23 PM
    • 140 Posts
    • 49 Thanks
    3card
    My first thought was as a FTB are you having a mortgage? if so does your lender know that the property is tenanted?

    If i were you I would still be looking around at other properties and i def wouldn't be spending any money on the purchase until the property is vacant

    If the tenants are forced out who knows what damage, etc they are going to cause

    Good luck with whatever you decide to do
    • Cakeguts
    • By Cakeguts 19th Apr 17, 7:49 PM
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    Cakeguts
    Time to have a think about this. The property has tenants. You now know that it could take at least 6 months for them to leave. You don't know what condition the property will be in when they leave. So you could instruct a solicitor to do all the legal work like searches and mining reports etc up to exchange and then find that you don't want to exchange contracts on a property that is not in the condition it was when you viewed it because the tenants have damaged it when they left. You will have spent money on the buying process but you won't buy the house in the end.

    Or you could delay spending money on the searches etc for 6 months until the property is vacant and then pay for them then. You could still find that the property has been wrecked but at least you could pull out of the sale before it had cost you any money. While you are waiting for it to be vacant the owner could accept an offer from an investor and sell it in a few weeks.

    The chances of you ever owning this property to live in are extremely small because there are so many problems associated with it. I don't know what makes you want to buy this house rather than any others but if it is because it is cheaper that is because unless you are an investor you are going to have to wait a long time for it to become vacant and then you run a huge risk on what state it will be in. An investor will buy it because there are already tenants and the price will be based on the rental return.

    This owner will not want to lose the rent on this property while he waits for you to act after you have got vacant possession. What he wants to do is to keep getting rent right up until the day he sells it.

    You have to remember that the property is not yours until you have paid for it. At the moment there is a chance that you won't pay for it for over 6 months time if the tenants decide not to leave. Up until exchange of contracts either side that is you or the seller can change their mind about the sale. So just because your offer has been accepted doesn't mean that the seller has to sell to you. If he gets a better offer he could sell to them instead. In order to reduce the chance of this happening people usually get their solicitor to start work as soon as possible on the legal work. They also get the surveys done as well. In your case though there is no point in doing any of this until the property is vacant so the property will remain open for anyone else to buy until the tenants leave.

    What could also happen is that once the tenants leave the owner could take the house off the market and then sell it for more because it is now vacant. There are so many more things that could go wrong with buying this house than buying one that someone else has bought to live in themselves.

    It really isn't a good choice for a first time buyer because you don't understand all the aspects or risks of buying a house.

    I think people are giving good advice when they say that this isn't really a suitable property for you to buy and you would get on much better if you looked for something else.
    • Geek1337
    • By Geek1337 19th Apr 17, 10:28 PM
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    • 2 Thanks
    Geek1337
    Time to have a think about this. The property has tenants. You now know that it could take at least 6 months for them to leave. You don't know what condition the property will be in when they leave. So you could instruct a solicitor to do all the legal work like searches and mining reports etc up to exchange and then find that you don't want to exchange contracts on a property that is not in the condition it was when you viewed it because the tenants have damaged it when they left. You will have spent money on the buying process but you won't buy the house in the end.

    Or you could delay spending money on the searches etc for 6 months until the property is vacant and then pay for them then. You could still find that the property has been wrecked but at least you could pull out of the sale before it had cost you any money. While you are waiting for it to be vacant the owner could accept an offer from an investor and sell it in a few weeks.

    The chances of you ever owning this property to live in are extremely small because there are so many problems associated with it. I don't know what makes you want to buy this house rather than any others but if it is because it is cheaper that is because unless you are an investor you are going to have to wait a long time for it to become vacant and then you run a huge risk on what state it will be in. An investor will buy it because there are already tenants and the price will be based on the rental return.

    This owner will not want to lose the rent on this property while he waits for you to act after you have got vacant possession. What he wants to do is to keep getting rent right up until the day he sells it.

    You have to remember that the property is not yours until you have paid for it. At the moment there is a chance that you won't pay for it for over 6 months time if the tenants decide not to leave. Up until exchange of contracts either side that is you or the seller can change their mind about the sale. So just because your offer has been accepted doesn't mean that the seller has to sell to you. If he gets a better offer he could sell to them instead. In order to reduce the chance of this happening people usually get their solicitor to start work as soon as possible on the legal work. They also get the surveys done as well. In your case though there is no point in doing any of this until the property is vacant so the property will remain open for anyone else to buy until the tenants leave.

    What could also happen is that once the tenants leave the owner could take the house off the market and then sell it for more because it is now vacant. There are so many more things that could go wrong with buying this house than buying one that someone else has bought to live in themselves.

    It really isn't a good choice for a first time buyer because you don't understand all the aspects or risks of buying a house.

    I think people are giving good advice when they say that this isn't really a suitable property for you to buy and you would get on much better if you looked for something else.
    Originally posted by Cakeguts
    I definitely understand that there are risks associated, which is why I'm trying to get as much information as I can before jumping into making this decision.

    The area the house is is perfect for me, it's a location where houses are very rarely put on the market at a price I can afford. Probably the reason why they've accepted an offer lower than the asking price is because lots of buyers have been put off by the current situation. Yes, this is a risky situation but luckily as a FTB I'm in a situation where I have very little pressure on me to rush into a sale.

    Waiting 6 months to move into a property would be fine, my major fear is paying for surveys and solicitors and then having the seller take the property off the market or accepting a higher offer - which is the risk if I delay exchanging contracts.
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