Tenants and Exchange of contract

leanne86

I am in the process of buying my first house (yey!). The property currently has tenants in.

The estate agents told me:
The vendor will not issue notice to the tenats until contracts have been exchanged, as if it fell through they would loose their tennats.

The solicitor wrote:
Exchange of contracts can not take place until the tenants have vacated the property.

I'm sure i will find out in due course, but is anybody aware of the usual course of action in cases such as this?

Thank you in advance!

Soot2006

Vendor is mad
He could exchange & commit to a completion date. Tenants could refuse to move out ... And then wouldn't he become liable for noncompletion and everything would be horribly complicated and take forever ...

Definitely only exchange when tenants are gone. Your solicitor is correct.

when were you hoping to move?

PasturesNew

It's catch 22. You CAN'T exchange until it's empty.... he WON'T get them out first. There's nothing you can do, the ball's in his court.

Normally to sell a property with tenants in, a LL has to get it empty first, or, sell to another landlord who intends to keep the tenants in there.

clutton_2

the lender will not give you the money till the tenants are out - as they insist on Vacant Possession... worst case scenario it could takea year to get stubborn tenants out......

i agree with soot.... mad vendors..

leanne86

Thanks guys.

I agree i'd definately be happier exchanging with tenants gone.
Tenants were in when we were showed round and they were aware of the sale and aware they would have to find alternative accomodation, so hoping that once they have been given notice they will move on a.s.a.p.
We have a mortage offer which expires 05/05/10, tenants require 2 months notice so hopefully if everyone cooperates all shud be fine.

I just want it signed and sorted, then i know it's definately ours!

franklee

Sorry but they're not necessarily mad vendors, they could be desperate ones. I've lost count of the number of accidental landlords on here who say they can't afford consent to let, they have no contingency money, they rely upon the rent to pay the mortgage. Clearly people like that can't afford to get the property empty before exchange once you consider the two or three months it takes to give a tenant notice and take the risk the sale falls through during the wait leaving them without tenants or a buyer. OTOH of course the solicitor is right. The vendor probably leapt into renting out without considering an exit strategy.

OP listen to your solicitor and take his advice.

Fire_Fox

leanne86 wrote: »

I am in the process of buying my first house (yey!). The property currently has tenants in.

The estate agents told me:
The vendor will not issue notice to the tenats until contracts have been exchanged, as if it fell through they would loose their tennats.

The solicitor wrote:
Exchange of contracts can not take place until the tenants have vacated the property.

I'm sure i will find out in due course, but is anybody aware of the usual course of action in cases such as this?

Thank you in advance!

Your lender will probably not mortgage on the property without vacant possession. The tenants must be served two months notice coinciding with a rent period, if they make a pig's ear of this or the tenants refuse to go it could be six months. The only way around it is to have a long period between exchange and completion to guarantee vacancy. This would put you at great risk as you may not be able to raise a mortgage at the key time (see the many off-plan threads). The estate agent should know all of this, so they really should be leaning on the vendor to issue the notice to quit.

G_M

StiflersMom wrote: »

I bought my house under a "conditional exchange" as the tenants were still there at the point of exchange (but gone by completion). Worked very well...

No such thing. Either you Exchange and there is an enforcible contract, or you don't.

Do you mean there was a condition in the contract when you Exchanged? Of course there was! In fact many! One normal condition is that the vendor will provide vacant possession on Completion.

But the vendor cannot guarantee this as has been pointed out, since it might take 6 months to get the tenants out.

Don't Exchange till the house is empty.

Richard_Webster

Vendor is mad
He could exchange & commit to a completion date. Tenants could refuse to move out ... And then wouldn't he become liable for noncompletion and everything would be horribly complicated and take forever ...

I agree with this, but if you as a buyer don't mind waiting it doesn't really matter to you.

If I was acting for a buyer who was not also selling and was not in a hurry I would point out the problem - that the seller might not be able to give vacant possession on completion - and leave it to my buyer client whether or not he exchanged. After all if vacant possession could not be given then the seller would be in breach of contract and if he would have to cope with the consequences. You could sit back and wait, or after a giving the right notices, rescind the contract and get your exchange deposit back.

leanne86

Well it's a couple of weeks later now. Progress report:

Our solicitor reports the contract remains conditonal upon the tenants vacting the property upon completion. If they don't leave we can leave with our deposit.

Contracts should be exchanged within the next day or so, so the tenants can be given notice to leave on the 8th March (their rent day). However the tenants will not be obliged to leave until 8th May, our mortage expires on the 5th May. So solicitor is contacting Natwest to request a few days extension.

Also we are renting ourselves, we plan to give one months notice on the 5th May (our rent day). But will write that our completion date is a few days later, and if things go wrong we will contact landlord immediately to request they terminate the search for new tenants.

So fingers crossed but hopefully nearly there...... Really don't want to have to do this again any time soon!

silvercar

Contracts should be exchanged within the next day or so, so the tenants can be given notice to leave on the 8th March (their rent day).

I don't see how this follows. Unless the tenants are coming to the end of a fixed term and have previously been served a section 21 I don't see how they can be expected to pack up and go in 5 days!

However the tenants will not be obliged to leave until 8th May, our mortage expires on the 5th May. So solicitor is contacting Natwest to request a few days extension.

Standard 2 months notice then. What happens if tenants don't go for a few days after this and your mortgage offer expires?

Also we are renting ourselves, we plan to give one months notice on the 5th May (our rent day). But will write that our completion date is a few days later,

You should give notice by 5th April that you intend leaving by 5th May.