Tenants

mrtazz

Hi, im looking to buy a house. the bit im unsure about is the property is has short hold tenancy and the contract ends in 2012. i am planing to move within 2 months after the property is mine. how can i get the tenants to leave?

BitterAndTwisted

If you're buying the property with a residential mortgage your conveyancing solicitor will not exchange contracts without full vacant possession. It will be the vendors responsibility to evict those tenants, not yours, so this property will almost certainly not be available to you until some time next year.

Werdnal

Firstly, as B&T says above, you cannot take over the property with tenants in place if you are buying with a residential mortgage - your mortgage and house insurance will be void unless you are living there yourself!

If you are buying with tenants on a fixed term contract, that contract is binding and you cannot get them to leave before the fixed term ends. You will take on all the responsibilities of being their landlord and be tied to the terms and conditions of their rental agreement until the fixed term ends. You can give notice, but it will not come into force until the fixed term ends.

If the fixed term has already passed, and tenants are on a statutory periodic tenancy, then you need to give 2 months notice in writing, which must be issued correctly for the notice to be legally binding. This is not a notice to quit, but a notice that you will apply to the court for possession and an eviction order after the 2 months has passed. Some tenants may leave by or before that time, but if not, you will then need to take them to court and evict - this can take several months according to the workload of your local court.

Speak to the solicitors and find out exactly the terms of the rental agreement the tenants have, the exact dates it started, whether there is any fixed term and if so when it expires. If you still wish to continue, and the fixed term on the contract has passed, ask that the current owner evict the tenants themselves, and therefore bear all the costs of this action, before you exchange contracts.

Buying with tenants in situ is really only for people looking to become landlords and a minefield you should avoid if you are looking to live there yourself.

GDB2222

It's okay, because eventually you will get the tenants out, but you should expect a decent discount from the VP price.

mrtazz

Thanks for all the info. the contract ends 2.1.2012. i was thinking of going direct to the tenants and explaining the situation. if they agree to leave the property few months before the end date of the contract and as a compensation i can offer them money. is this legal to do so and should i get this done in writing?

Werdnal

mrtazz wrote: »

Thanks for all the info. the contract ends 2.1.2012. i was thinking of going direct to the tenants and explaining the situation. if they agree to leave the property few months before the end date of the contract and as a compensation i can offer them money. is this legal to do so and should i get this done in writing?

You can try to negotiate an early surrender, but the tenants do not have to agree as they have a right to remain until the end of their agreement. You would probably have to offer quite a hefty compensation to make it worth their while if they are settled.

You would need to draw up a legal surrender document, and get them to sign to cancel the agreement and surrender their claim to the property. You would also need to ensure that their deposit is returned (probably in full if you are requesting early end) - their current LL should have this protected in a scheme and you would need to get this released.

When you say you want them to leave "a couple of months early", would this be at the point of sale, or after you have bought the property and are ready to move in yourself? If the latter, I hope you have noted the comments above about your mortgage not being valid if you are buying on residential terms and the tenants are still in situ after your completion. You would therefore need to get the early surrender agreed and get vacant possession before you complete the deal, which will prove very difficult as you are not the legal owner of the property until you exchange.

I would make any approach to the tenants via your solicitor, to ensure it is done legally and you are not accused of harrassing the tenants.

BitterAndTwisted

No, this kind of arrangement needs to take place between the current owners and the tenants or it cannot be legally binding. Do not get involved.

mrtazz

werdnal, thanks for that. what i meant was straight after the sale. the place im interested in is being sold through an auction. my plans are to buy with a bridging loan for 12 months. do a quick renovate and then sell. and at the end come out with a profit.

to draw up a legal surrender notice what should i include in there.

bitterandtwisted. i guess it can be done when papers have been signed and i become the owner.

sequence

What are your plans for when the tenants don't move out ?

hazyjo

Do you know the rates for a bridging loan?! They're short term options, not something to consider for a year!

You want a profit... after paying high interest on a loan, doing a 'quick renovate' in a (primarily) falling market?

Where is this place?!

As others have said, you won't be able to buy it unless as a LL.

Jx

bris

If it is going to auction then it will almost definitely be sold with sitting tenants. This will mean only a BTL or cash buyer will be interested in it.
A bridging loan for 12 months, have you done your sums on this? Even if you did get one under the circumstances, the rate would mean a huge loss.
Have you asked the tenants if they would be prepared to move, if they say no, then after the fixed deal is up it could take months to evict them if they decide to wait for the court order.

The only real option open to you is to apply for a BTL mortgage and do it properly, it would mean a large deposit though so it depends if you can do this. If you did manage it though at least you have a tenant in place which will pay the bills until they leave and then you can get started with the plan.