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

franklee

bf206 wrote: »

The agent tells us they've been looking at buying (they did have another place to sell first, not sure if they have) but obv in the current timeframe, we hope they're looking at rentals!!!

No way of knowing whether they're actively doing either, of course...

Yes, if they are renting next it's easier to arrange.

If they are purchasing, depending on how far along their purchase is it may be that moving to another rental to bridge that gap really mucks them up. Fortunately your landlord has been accommodating and you don't have to but just think of the effect on you if you had to move rentals and sign up for a minimum six months at this point, it would snooker your purchase. Maybe similar is true of them with the difference that they didn't initiate this.

Also I suggest you ask your solicitor about what happens if you don't pull out on the long stop date. Is that an option that remains open to you thereafter? Could there be for example a situation after the long stop date when the vendor serves you five days notice to complete that crosses in the post with your withdrawal. Which prevails then?

Voyager2002

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.

No, that will not help you. Rather, doing this would effectively release the vendor from the contract to sell to you and mean that you would have no remedy for the various costs that you have incurred as a result of his failure to honour the contract.

DVardysShadow

Voyager2002 wrote: »

No, that will not help you. Rather, doing this would effectively release the vendor from the contract to sell to you and mean that you would have no remedy for the various costs that you have incurred as a result of his failure to honour the contract.

Nice thought. But mistaken. The way this contract is constructed, the Vendor is to all intents and purposes freed from the obligation to complete and exonerated from penalties, so there is no remedy. He is only due to pay a penalty if the tenants move out and he fails to notify that he can give Vacant Possession - but if he could do that, then he would presumably want to get on and complete.

ruggedtoast

bf206 wrote: »

And I thought you were trying to cheer me up!

I won't quote the contract but at length but it does specify that vendor and buyer agree to a completion date of x. Just that then if vacant possession isn't available on that day, the vendor can tell us when it is (with five days' notice) but if it gets to the longstop date, we can withdraw without penalty.

I actually think it helps us that it doesn't specify a get-out for the vendor - no?

As Dvardy said, if your vendor wants to blow the sale he just has to specify a completion date after this long-stop date.

If you want to blow the sale you can't.

You may want to go ahead anyway but this contract is in no way equal, advantageous to your, or in any way to your favour.

The point of a contract is usually that it binds both parties, not just one.

To be honest I would run a mile at this, what if your mortgage company finds out you've exchanged on a place without vacant possession, doesnt get on board with this odd contract idea, and pulls your mortgage? You'll still be bound to complete.

Your vendor just wants to have his cake and eat it.

bf206

franklee wrote: »

Yes, if they are renting next it's easier to arrange.

If they are purchasing, depending on how far along their purchase is it may be that moving to another rental to bridge that gap really mucks them up. Fortunately your landlord has been accommodating and you don't have to but just think of the effect on you if you had to move rentals and sign up for a minimum six months at this point, it would snooker your purchase. Maybe similar is true of them with the difference that they didn't initiate this.

Also I suggest you ask your solicitor about what happens if you don't pull out on the long stop date. Is that an option that remains open to you thereafter? Could there be for example a situation after the long stop date when the vendor serves you five days notice to complete that crosses in the post with your withdrawal. Which prevails then?

Thanks, yes will def check this with the solicitor on Tues. The way I'm reading the contract, the longstop date gives us the ability to pull out but not the vendor. I assume that in practice the crunch point is going to come more around the day when the tenants are due to vacate. If they're not out by then, I think we'll need to assume they're in it for the long haul and I doubt we'll want to hang around to see them evicted etc.

Would be different of course if in the next few weeks we're told the tenants have found somewhere that isn't available till say a week or so after the originally specified completion date so they don't want to vacate until then. I suppose that's really for the landlord but either way, I think we'd all be delighted if that happened! Would still fall before the longstop date etc.

I still think we have a potential bargaining chip in that we don't have to rescind the contract come 4 June - although some on here disagree!

bf206

ruggedtoast wrote: »

As Dvardy said, if your vendor wants to blow the sale he just has to specify a completion date after this long-stop date.

If you want to blow the sale you can't.

You may want to go ahead anyway but this contract is in no way equal, advantageous to your, or in any way to your favour.

The point of a contract is usually that it binds both parties, not just one.

To be honest I would run a mile at this, what if your mortgage company finds out you've exchanged on a place without vacant possession, doesnt get on board with this odd contract idea, and pulls your mortgage? You'll still be bound to complete.

Your vendor just wants to have his cake and eat it.

Agree re the vendor.

Lender is aware that property is tenanted and that the tenants are due to vacate ahead of completion. And that if they don't, we can pull out.

GDB2222

bf206 wrote: »

I still think we have a potential bargaining chip in that we don't have to rescind the contract come 4 June - although some on here disagree!

Nobody here can agree or disagree, as we have not seen the contract. However, I agree it's a point worth checking out.

NeverAgain_2

I don't think you are in such a bad position.

Your aim is to move from rented into bought, and you will achieve that, either with this house or another one.

You have your landlord and lender onside.

What the parties involved in the house you want to buy think of you doesn't matter.

pinkshoes

DVardysShadow wrote: »

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

Just read this whole thread, and this was EXACTLY what I was thinking!!

There is absolutely NO pressure whatsoever on the vendor here.

I also think your solicitor has been very weak, and given you very poor advice. One month notice?!? The solicitor really should have known that the minimum is 2 months from a rent date!!


I would have insisted at the very least that the vendor pay all out of pocket expenses if you reach the end of your mortgage term. Even better, I would have insisted on him paying a 10% penalty!

Personally I wouldn't try and extend the mortgage. I'd just tell the vendor that if you don't have vacant possession by <date> (when mortgage expires), you will withdraw from the sale, and he will be liable for a new mortgage fee.

I'd also demand to see a copy of the S21 to check it's been issued properly, along with the tenancy agreement.

somethingcorporate

pinkshoes wrote: »

Just read this whole thread, and this was EXACTLY what I was thinking!!

There is absolutely NO pressure whatsoever on the vendor here.

I also think your solicitor has been very weak, and given you very poor advice. One month notice?!? The solicitor really should have known that the minimum is 2 months from a rent date!!


I would have insisted at the very least that the vendor pay all out of pocket expenses if you reach the end of your mortgage term. Even better, I would have insisted on him paying a 10% penalty!

Personally I wouldn't try and extend the mortgage. I'd just tell the vendor that if you don't have vacant possession by <date> (when mortgage expires), you will withdraw from the sale, and he will be liable for a new mortgage fee.

I'd also demand to see a copy of the S21 to check it's been issued properly, along with the tenancy agreement.

I agree with this post entirely. OP, your representation has been very weak and you are in quite a bad position as a result. I am very surprised that both your solicitor and lender let it get this far.

I would have run a mile by now, got myself a decent lender and new solicitor as the ones you have at the moment appear clueless. The landlord you are buying from also appear stupid, greedy and naive.

Good luck, I think you are going to need it for this to end positively.