Selling house with tennant to friend for December

danht

Please advise!
We couldn't sell last summer so ended up letting our house for 12 month tennancy due to finish end of December. We have since found a friend who is willing to offer a fair price for our house (at the price it was for sale in December after several drastic price cuts but with the advantage of no agency fees). The offer is subject to a contract to complete at the end of the tennancy agreement in December 2009. This is obviously taking a bit of a risk that house prices won't increase significantly by end of year. We have not informed the tenant yet and would not like to upset them after they have been renting for only 4 months. Can anyone see any problems with this idea?
We are currently renting and would rather be back in a place that we could call our own home.
Any help or advice very much appreciated.

Blacksheep1979

If the tenant doesn't leave and or damages the property you're going to be liable for all costs.

Geenie

You say that the sale will not go through until the tenancy ends, so that is fair, but I think you should let your tenants know in plenty of time. You dont say if the friend buying intends to live there or will continue renting it out, but I asume from your thread they will want them out. So the tenants will need 2 months notice if it is wanted empty by December.

Honesty is the best policy in my books, and I would tell the tenants what is going on and the reasons why. You have signed for 12 months and are delaying the sale to honour this. They must be aware that you had tried to sell before letting it out, so this may not be such a great surprise. Treat them with respect.

RomansProperties

If you talk to your tenenats you may find they would be agreeable to moving out before the 12 months if you made some contribution towards the costs they will incur.
If they go for this you could be in your own home earlier.
Its best to keep them informed of the situation.

GDB2222

danht wrote: »

The offer is subject to a contract to complete at the end of the tennancy agreement in December 2009. This is obviously taking a bit of a risk that house prices won't increase significantly by end of year.

It's no problem for the tenant, as you will remain the owners until they leave. I see no need to tell them until later in the year, when you should give them warning that their tenancy will not be renewed. The rental market is flat in December, so they may want to move out early. Will your friend agree to a flexible completion date for his purchase?

How will your friend be funding this purchase? Will he still be able to afford it if property prices decline another 10-15% between now and December? There's been a bit of a Spring bounce in the property market, but I wouldn't count on this continuing. That bounce reflects a large reduction in interest rates that can't be repeated. I am not saying that prices will definitely drop by that much this year, but you should plan for the possibility.

It would be prudent for you not to exchange contracts to buy somewhere else until your sale of the tenanted property has completed, not just exchanged.

danht

Many thanks for the replies.
The purchaser wants the house so much that they are prepared to rent in the interim or move in with their parents. They have an offer for their house, but will only accept if we agree to sell them our house in December. The only risk I can see for us is that by agreeing a price now then if prices go up we will find it more difficult to afford to buy.