FTB buying a flat with existing tenants

ShaunX

According to the agents, the tenants can be served notice immediately. Whether the vendor does or not is another question but i would want him to serve notice as soon as an offer is accepted as i won't exchange until the property is vacant. I will certainly wait 2 months, but not much longer, if 2-3 months pass and there are still issues i'll probably walk away. In the mean time i'll keep looking at other places but i do like this flat.

Any ideas on how far along the buying process i can go whilst the tenants are still there, if they have been served notice?

kingstreet

Shaun - the main problem is you're going to spend money on surveys and searches with no guarantee you'll have a property at the end of it.

Let's imagine you accept the word of the vendor (!) or the vendor's agent (!!!) who tell you everything will be fine...

You apply for a mortgage, pay your survey and valuation fee, perhaps commit to a mortgage product fee. You then give your solicitor £350 to cover searches and commit to their fees on top. :eek:

This goes on for six weeks and just at the point you're thinking you're about to exchange, you're told there's a problem and the tenants won't leave. You then have to decide whether to hang around and wait, or cut your losses and find something else. The vendor may rely on you spending this money so you'll stick around while he sorts his problem. :mad:

G_M

ShaunX wrote: »

According to the agents, the tenants can be served notice immediately.

The agent is interested only in the sale. Anything to get you to make an offer and the seller to accept it. Is he an estate agent or a letting agent? Does he know tenancy law?
Do not rely on his statements, ask to see the tenancy agreement. This is the only way to find out if the tenants have security or can be asked to leave.

shimano: Tell the seller can only exchange and complete once a moving out date has been agreed between them, then factor it in as a clause for docs for exchange.

If he wants to sell to you, he's gotta sort out vacation. Assuming you want to live there, I personally wouldn't put the responsibility on you to sort it out.

Bad advice. Agreeing a date means nothing. The tenant may fail to abide by the agreement. Only Exchange (Note Exchange, not Complete) once the tenant is actually out.

And why exactly does the seller have to sort out his holiday......?

Any ideas on how far along the buying process i can go whilst the tenants are still there, if they have been served notice?

This is a very good question. Personally I would not start spending money on surveys, searches etc till the tenants were gone.

This is a common problem. Vendor wants to keep tenant in place till the last minute as he wants the rent to keep coming in till the property is sold. Totally unrealistic as the risk to buyer is too great. If the vendor is serious about selling he needs to get the tenants out and offer the property for sale without any hindrances.

ShaunX

Vacation as in vacate property i think was meant (unless that was a (bad!) joke?)

Yes wasting money is a worry.

I am going to ask the agent to advise the seller i would require him to serve notice immediately upon any offer acceptance. Then i will put this on hold for 2 months until the tenants have moved out. Only then will i kick off the buying process, finalising mortgage/instructing solicitors etc.. In the meantime i'll carry on looking elsewhere.

Does this sound sensible? Is seller likely to be prepared to wait 2 months in addition to the usual time it takes - guess i will find out.

I suspect, if he agreed to serve notice and wait, he would probably accept another offer from a BTL investor who was prepared to buy the tenancy too.

Catblue

Any chance you could talk to the current tenants during your second viewing?

Ask them when they are leaving and see what they say. This whole "it's a one year contract but they can be kicked out at any time" sounds suspicious to me. I feel that the agent/vendor want to snare you and so are telling you all sorts of porkies to keep you sweet.

Make sure that you have the correct information before you spent any more time or money on this. Do not rely on the word of people who may wish to string you along.

G_M

As I've said before, ask to see the tenancy agreement. Only then will you know whether the tenants can be asked to leave. Even if they can, there's no guarantee it will only take 2 months.

Werdnal

The agent is not actually telling any lies when they say you can issue notice at any time - some landlords automatically issue an S21 Notice a few days after a tenancy actually starts. BUT this notice only takes effect 2 calendar months BEFORE the break clause date or BEFORE the fixed term ends.

The 2nd problem is this notice is NOT notice to quit - it is notice that LL wishes to seek possession. Tenants can sit tight and ignore it, forcing LL into court action with all the delays, expense and hassle that involves. Depending upon how busy court workload is in your area, LL waits the 2 months, then processes all their court action paperwork and waits again to come to the top of the list. Judge then reviews the application for possession - beware that if one date is incorrect or one piece of information is ambiguous (even down to a spelling error), judge can throw out the whole thing making LL start over - join the queue again! Then if LL is awarded possession, they join the list to await court bailiffs to attend to evict tenant - Simples!

Please think very carefully whether you really want to embark on your first property purchase with all this uncertainty hanging over you. There is no guarantee that anything will happened within 6 months, never mind 2, and without a definate break clause, this action may not even start until after Christmas!

Don't do it!:mad:

ShaunX

Well according to agent, the contract started in January, with 6 month break clause which is activated now so notice can be served immediately.

Are tennants really likely to sit and ignore the notice? Won't the court order scare them off? The tenants are two girls in their 20s...from what i saw of their flat they look like they are professionals... obviously this is complete conjecture, but my feeling is they'd look elsewhere. I take on board though even if notice is served does not guarantee tenants vacating in 2 months.

I'll keep this going... will put it on hold when any offer is accepted, then continue looking elsewhere i think...

shimano

G_M wrote: »

Bad advice. Agreeing a date means nothing. The tenant may fail to abide by the agreement. Only Exchange (Note Exchange, not Complete) once the tenant is actually out.

Surely if completion is subject to vacant property, onus is on vendor to sort out, and if not, OP can do vendor for breach of contract..

Werdnal

ShaunX wrote: »

Well according to agent, the contract started in January, with 6 month break clause which is activated now so notice can be served immediately.

PLEASE do not take the agent's word for anything. You must get a copy of the letting agreement and go through it with a fine tooth comb. The agent has a vested interest in selling, and will happily tell you (if you come across to them as unfamiliar with buying and letting as you do here), anything to get you to go ahead.

As for tenants staying put, you may be lucky that they do start instantly looking for alternative accommodation, but you do not know and will not be able to confirm anything until the day they actually move out.

If you want to continue, and the agent is correct that notice can be issued now, then get vendor to do it now. Tell them any offer is subject the vacant possession, but be prepared that it may take longer than you think.