Tenants threatening to block completion on our property purchase...

DVardysShadow

bf206 wrote: »

Thanks DVardysShadow - even if I can't quite bring myself to click 'thanks' when faced with the truth!

But that sounds like it in a nutshell. The agent still thinks the tenants will calm down, see sense and move out on time. Maybe that will happen but it's the uncertainty that's the killer for us.

Looking at the wording in the contract re the longstop date, it doesn't actually say the agreement is null and void if it reaches that point - just that "the buyer has the right to rescind the contract without penalty and with the deposit returned in full."

So, if this is a dastardly plot by the tenants to force the vendor/landlord to sell to them, surely that can't happen unless we formally pull out!?

bf206 wrote: »

Franklee, yes we're going to try and get the mortgage extended - our broker's on the case.

We also, as people have suggested, need to get our own notice extended on our current rental - unless we do the same as these other tenants are doing...

Like I say, we've met the tenants, chatted with them, we have kids of a similar age etc. This property has been on the market since last September, which is when we first saw it too, and so we've been probably three times and had decent chats every time, with them talking about their own plans to move out and buy somewhere else. In hindsight, clearly we were wrong to be reassured by appearances.

I get they're legally entitled to do what they're doing - we just don't like it! Mind you, if has been suggested the tenants are doing this in order to force the vendor to sell to them, I might have somewhat harsher feelings towards them...

My take is that the tenants are slightly but not totally miffed that their LL will not sell to them and they are holding out for the Landlord to buy them off. And they are quite prepared to cause problems for others.

This does need thinking through - but I would suggest that your best bet is to minimize the opportunity for the tenants to make money out of this. So you could put notice in now that you will rescind the contract immediately on the longstop. This will put the tenants in a stronger position against the Landlord in the short term - in that the Landlord will have to decide whether to pay them off or not. But in the longer term if the Landlord decides not pay them off, they end up with nothing whereupon they may just move out, leaving the Landlord with no tenant and no purchaser.

Possibly better, although this requires some trust between the seller and you - and your position is weak, because of having given notice on your own tenancy - is for the seller and you to agree that the sale contract is void, but the seller to tell his tenants that you have pulled out [obviously undermined if they know about the longstop]. This leaves the tenants with a S21 notice and no leverage for being paid off - and you and the Landlord free to reinstate the contract once the tenants are gone - provided the pressure on your current rental is not too great.

bf206

DVardysShadow wrote: »

My take is that the tenants are slightly but not totally miffed that their LL will not sell to them and they are holding out for the Landlord to buy them off. And they are quite prepared to cause problems for others.

This does need thinking through - but I would suggest that your best bet is to minimize the opportunity for the tenants to make money out of this. So you could put notice in now that you will rescind the contract immediately on the longstop. This will put the tenants in a stronger position against the Landlord in the short term - in that the Landlord will have to decide whether to pay them off or not. But in the longer term if the Landlord decides not pay them off, they end up with nothing whereupon they may just move out, leaving the Landlord with no tenant and no purchaser.

Possibly better, although this requires some trust between the seller and you - and your position is weak, because of having given notice on your own tenancy - is for the seller and you to agree that the sale contract is void, but the seller to tell his tenants that you have pulled out [obviously undermined if they know about the longstop]. This leaves the tenants with a S21 notice and no leverage for being paid off - and you and the Landlord free to reinstate the contract once the tenants are gone - provided the pressure on your current rental is not too great.

Really appreciate your help. I think I favour your first option. Before anyone accuses me of being anti-tenant it's more because, as various people have pointed out, this seller/vendor doesn't seem the most trustworthy character.

Am optimistic our current landlords will give us some slack. Exactly how much depends on whether they get a buyer for this place.

GDB2222

bf206 wrote: »

We'll definitely see if our landlords can give us longer here, as has been suggested. Problem being, when we gave notice, it prompted them to put this place up for sale! It hasn't gone yet but has had offers. I guess completion on this place is most likely months away in any case - there isn't currently a buyer lined up.

That's perfect from your own landlord's point of view. They have you paying rent and covering the council tax whilst their property is being sold. They would be completely balmy to insist that you move out on the original date. It would be far more difficult if they had a new tenant queued up, waiting to move in.

bf206

GDB2222 wrote: »

That's perfect from your own landlord's point of view. They have you paying rent and covering the council tax whilst their property is being sold. They would be completely balmy to insist that you move out on the original date. It would be far more difficult if they had a new tenant queued up, waiting to move in.

Yes, and they've emailed me today saying we can stay on. How long we can stay I suppose depends on when they find a buyer and what their own timescale for completion is. Unlikely to be as soon as seven weeks' away, hopefully.

DVardysShadow

bf206 wrote: »

Really appreciate your help. I think I favour your first option. Before anyone accuses me of being anti-tenant it's more because, as various people have pointed out, this seller/vendor doesn't seem the most trustworthy character.

Am optimistic our current landlords will give us some slack. Exactly how much depends on whether they get a buyer for this place.

I think that by being too eager to get hold of this property and permitting a exchange, you have actually put it out of reach. I suggest you plot a course out of your current rental into another [unless current LL accepts withdrawal of your notice] after the long stop date. It may be that plotting this course puts the purchase back in the frame, but it is clear to me that anything you do to try and keep it in the frame will make it unattainable.

Hard lesson, sorry to say.

GDB2222

DVardysShadow wrote: »

This does need thinking through - but I would suggest that your best bet is to minimize the opportunity for the tenants to make money out of this. So you could put notice in now that you will rescind the contract immediately on the longstop. This will put the tenants in a stronger position against the Landlord in the short term - in that the Landlord will have to decide whether to pay them off or not. But in the longer term if the Landlord decides not pay them off, they end up with nothing whereupon they may just move out, leaving the Landlord with no tenant and no purchaser.

Can I advise, in the strongest possible terms, not to do this. By all means, put as much pressure as you like on the vendor by telling him that you will PROBABLY rescind the contract at the long stop date. However, there is no benefit to you whatsoever in giving formal notice in advance to rescind the contract at this stage. You definitely need to keep all of your options open. For example, if you keep the contract open to buy the property, this stops the vendor selling to the current tenants and reduces their bargaining power.

GDB2222

bf206 wrote: »

Yes, and they've emailed me today saying we can stay on. How long we can stay I suppose depends on when they find a buyer and what their own timescale for completion is. Unlikely to be as soon as seven weeks' away, hopefully.

Typically, purchases take about 3 months from acceptance of the offer to completion. That is assuming that there is no complication.

bf206

GDB2222 wrote: »

Can I advise, in the strongest possible terms, not to do this. By all means, put as much pressure as you like on the vendor by telling him that you will PROBABLY rescind the contract at the long stop date. However, there is no benefit to you whatsoever in giving formal notice in advance to rescind the contract at this stage. You definitely need to keep all of your options open. For example, if you keep the contract open to buy the property, this stops the vendor selling to the current tenants and reduces their bargaining power.

Absolutely - to be honest, I had read it more as you present it anyway!

I agree with the idea of focusing pressure on the vendor. My solicitor has now emailed the vendor's, enclosing my email correspondence with the agent (where the agent has actually cast doubt on whether the vendor can deliver vacant possession), and basically said "my client wants to know if your client is able to complete with vacate possession, as per the contract.

I guess he might just come back and say yes, s21 has been served, tenants due out the day before completion etc. If he says that, he's either kidding himself - or has done some side deal with the tenants. But surely the latter is paranoia too far!?

DVardysShadow

GDB2222 wrote: »

Can I advise, in the strongest possible terms, not to do this. By all means, put as much pressure as you like on the vendor by telling him that you will PROBABLY rescind the contract at the long stop date. However, there is no benefit to you whatsoever in giving formal notice in advance to rescind the contract at this stage. You definitely need to keep all of your options open. For example, if you keep the contract open to buy the property, this stops the vendor selling to the current tenants and reduces their bargaining power.

I would be thinking the same, but for the fact that OP has given his own notice to a Landlord who is now selling. Unless OP can get Landlord to accept in writing that the notice is withdrawn, this needs taking notice of

jjlandlord wrote: »

Your landlord does not need to serve you with a s.21 notice: if you served him with your notice to quit then the tenancy will end and if you don't leave he will be able to start court proceedings without further notice.

Effectively OP does not have the luxury of being able to wait out the cat and mouse game between the vendor and his tenant. OP's Landlord get a hearing to evict OP BEFORE the vendor could get a hearing on his tenant.

If OP could wait this out, I would agree with you

DVardysShadow

bf206 wrote: »

Absolutely - to be honest, I had read it more as you present it anyway!

I agree with the idea of focusing pressure on the vendor. My solicitor has now emailed the vendor's, enclosing my email correspondence with the agent (where the agent has actually cast doubt on whether the vendor can deliver vacant possession), and basically said "my client wants to know if your client is able to complete with vacate possession, as per the contract.

I guess he might just come back and say yes, s21 has been served, tenants due out the day before completion etc. If he says that, he's either kidding himself - or has done some side deal with the tenants. But surely the latter is paranoia too far!?

The way the contract is constructed, there is no penalty on the vendor for not being able to complete. Absolutely none, do you hear?

This is because the contract only specifies a completion date on you -

if vacant possession (as required by our lender) isn't available on the day of completion, the vendor can give us five days' notice when it is

- there is none specified on the vendor.

So there is no pressure you can apply on the vendor apart from the loss of his sale, which his is aware of anyway. Not rescinding leaves him in the happy position of being able to take his time to deal with his tenants and you in the unhappy position of your Landlord possibly actually selling.

To maintain cooperation with you Landlord, you are practically compelled to cooperate with viewings - and not to derail them either. Now once he makes his sale to a certain point, do you think he is going to let you remain, knowing what a tenant can do? He already has your notice, so wonderful position, he does not have to wait 2 months for a S21 notice to take effect - 1 month after he got your notice, you are right out of notice altogether and he can go straight to court.

Do not underestimate how vulnerable you now are in your current place.