buying a house with a tenant in it

DVardysShadow

johnnyredgate wrote: »

I certainly wouldn't expect the tenant to move back in? The vendor is clearly expecting them to vacate for the sale. It is more a case of that they would be given first refusal as I would expect to relet the house, if they wished to take the offer - the house is in a small town with limited properties to rent and at the same time limited potential tenants.

So how would the tenants react to this?

• How very Gracious of His Grace Lord Redgate to allow us to rent our old house again after just 3 weeks living in a field. We were very fortunate to be able to keep our furniture in his cow barn.
• So this geezer, he buys the house, and we are turfed out. 3 weeks later he offers us the tenancy, saying I am sorry I had to turf you out, it was to protect my property rights. So that would be our furniture moved twice for nothing, us sleeping in a field, just for his property rights. Come the revolution, he will be first up against the wall, we will see to that.

johnnyredgate

Amazed at the replies here, anyone else buying this house is likely to expect the vendor to evict the tenant so they can move in. So tenant loses his home is the default here and it is the vendor doing the evicting not me.
I had hoped to be able to keep the tenant in the house, if that is what they wanted, without any vacant periold, however responses to my initial query have made it clear that I may not be able to ascertain the duration of the current tenancy, as there may be a pre-existing tenancy in place even if I am shown an assured short-hold tenancy - this is a big risk to take on purchasing a house, particularly if this risk is not factored into the purchase price of the hous. The rental yield would be lower or similar to a decent savings investment and the capital investment is likely to be decreasing so it is not a good investment property, especially if there is a risk that the value is significantly lower than purchase price anyway if there is a sitting tenant.
Given that if there is any risk of a the tenant having a protected tenancy which might not be declared or discovered if I don't seek vacant possession a solicitor is going to advise against purchase with the tenant in occupation I am just exploring alternative options. So my understanding is that it is better for the tenant to be evicted (by the vendor)and to find another tenant altogether and refuse to relet to the existing tenants if they wish to take the property.
Obviously most of this is speculation, it may be that a one day interval is sufficient for a new AST to be legal, or it may be that a one month interval is insufficient and any protected tenancy would still stand. No one has offered any specific advise on this, but at least it is giving me questions to ask my solicitor should I go ahead.

Of course it would be an inconvenience for a tenant to move out of the house for a short time, but given that total eviction is the default it really should be up to them whether they would take this option over finding somewhere else to rent altogether. I have spent a lot of time living in rented property myself and know that if I really liked a house and that this was the situation I would certainly be pleased to be have an opportunity to move back again if offered it by a new owner. Would obviously not be too happy about current owner selling my home though, and that is where I see the tenant's main issue being.

johnnyredgate

franklee wrote: »

This thread is confusing me.

If johnny wants a tenant in place why not buy as an investment with the tenant in place especially as "the house is situated in a small town/village with limited properties available to rent, at the same time with limited people seeking property to rent.".

If the issue is it may be a rent act tenant or an assured tenant with more rights than an assured shorthold tenancy then the property isn't going to be vacant in any case as the tenant would not be giving up their rights. In which case buying with vacant possession will likely fall through.

So step one is to find out for sure what type of tenancy it is. Step two discuss options and prices with the vendor to buy either tenanted or vacant.

If you can't do step one then I can't see it going anywhere.

Yes it is confusing me too, I expected to be able to do step one, which would obviously be the best option in theory for all parties, but have been cautioned about the pitfals of ending up with a protected tenancy. As stated it the house would not be purchased purely as an investment, the rental yield is not sufficent for that, but in the longer term as a home for a family member, therefore it is important that there is not a sitting tenant in the house.
The house is being sold with vacant possession as far as I am aware, although I also know from the EA that the tenant has not had much in the way of being prewarned about the sale, hence I was hoping that there would be a safe way of purchasing and allowing the tenant to stay in their home for the time being.
I appreciate that the sale will fall through for someone expecting vacant possession if there is an underlying protected tenancy, but if the only way of discovering this for sure is by evicting the tenant then surely that is what a solicitor is going to recommend doing and what needs to happen during the sale process. Also I presume this is the reason that vacant possession would be required for a btl mortgage, so it really seems that there is not a possibility to buy the property with the tenant remaining in it unfortunately.

DVardysShadow

johnnyredgate wrote: »

Amazed at the replies here, anyone else buying this house is likely to expect the vendor to evict the tenant so they can move in. So tenant loses his home is the default here and it is the vendor doing the evicting not me.
I had hoped to be able to keep the tenant in the house, if that is what they wanted, without any vacant periold, however responses to my initial query have made it clear that I may not be able to ascertain the duration of the current tenancy, as there may be a pre-existing tenancy in place even if I am shown an assured short-hold tenancy - this is a big risk to take on purchasing a house, particularly if this risk is not factored into the purchase price of the hous.

It is clear enough to me.

Yes, the possibility of a preexisting tenancy may cause you a problem. So you investigate - or your solicitor does on your behalf.

• You get the vendor to declare on oath when the tenants moved in
• You look at when the house was last bought and sold and you find names
• You look at old copies of the electoral register if you are allowed for this situation

If these do not yield an answer you are confident about, you get your vendor to put a proposition to the tenants that they are put on notice to quit to give you Vacant Possession or they sign a new AST and a deed waiving all rights under any previous tenancy.

If the Vendor can deliver neither deed nor Vacant Possession, you can be quite sure there is a problem.

If you can find a way of keeping these people as tenants without moving them out, they are likely to be well disposed to you initially. But if you turf them out and then relet to them because they had no other options, you can be sure they will resent you to hell and back from the moment they return to the moment they leave the property.

As you seem to have no feeling for this - for the rented property being the tenants home, might I suggest that you are in for a rough ride letting a property out.

seven-day-weekend

Don't ,see what the OP is doing wrong actually. The tenant will have to move out whoever buys the house. If the OP then buys it and puts it up for rent and the original tenant is given first refusal (assuming they are interested), what's the problem? How is any of it the OP's fault?

I take the point about it being the tenant's home, but it will be the vendor who evicts them, not the OP, and anyway, that is one of the pitfalls of privately renting.

johnnyredgate

Of course I have feeling for the house being the tenant's home, I would like it to remain their home, but I hadn't been aware of the potential pitfalls until I posted this. I would of course rely on solicitors advice in this matter ultimately if I went forward, as stated I would want the tenants to have the option to remain in their home, but would have to follow the legal advice paid for, and it seems the situation is not as simple as you state, and as I originally thought, if you can't obtain a btl mortgage without vacant possession.
All I was trying to do was to after my initial query was to explore the options here in the case that the vendor (not me) has to evict for a purchase to go through based on legal and mortgage requirements. It is NOT my preferred option to evict. As already stated I have spent many years as a tenant myself I am most certainly not without feelings or respect that a rented house is a tenants home and am very offended at your attitude. As stated it hadn't occured to me that there would be a problem with the tenants remaining in the property, I was initially wanting to get a better understanding of the effect on the value of the property only assuming that they could remain in situ and that the lease could be confirmed. However I am grateful to this forum that I have been better informed as to the situation and the issues to be aware of.
As people are unable to answer on here how the tenant can be reinstated in the house, if they wish to, with the minimum disruption I will obviously take professional advise on this matter should I proceed with purchase.

jamie11

If these do not yield an answer you are confident about, you get your vendor to put a proposition to the tenants that they are put on notice to quit to give you Vacant Possession or they sign a new AST and a deed waiving all rights under any previous tenancy.

I will point out that if indeed the tenants have a regulated tenancy then it will not matter a jot what they sign, a court would not allow an agreement that took away their important rights.

You best and only bet is to demand the current landlord gets them out...........if he can, if he can't then it's going to be a regulated tenancy.

johnnyredgate

seven-day-weekend wrote: »

Don't ,see what the OP is doing wrong actually. The tenant will have to move out whoever buys the house. If the OP then buys it and puts it up for rent and the original tenant is given first refusal (assuming they are interested), what's the problem? How is any of it the OP's fault?

I take the point about it being the tenant's home, but it will be the vendor who evicts them, not the OP, and anyway, that is one of the pitfalls of privately renting.

Thanks you have summed up the situation much better than me, having initially (naively) assumed that it would be possible for the tenant to remain in situ. As a tenant I feel that any hardfeelings I had about this would be directed at the existing owner, rather than a new owner offering first refusal.

johnnyredgate

jamie11 wrote: »

I will point out that if indeed the tenants have a regulated tenancy then it will not matter a jot what they sign, a court would not allow an agreement that took away their important rights.

You best and only bet is to demand the current landlord gets them out...........if he can, if he can't then it's going to be a regulated tenancy.

Yes exactly, and it has become clear from early comments on this thread that eviction is the only way of determining a regulated tenancy, and in that situation of course the tenants get to remain in situ and in all likelyhood ownership gets to remain with the current owner, unless they are prepared to sell at a price that reflects the situation. Cheers