Property at Auction

koradma

I have recently bought a property at an auction. Am about to complete in 8 days time. Here is something we have found after the face. I should have done the checks before hand, but would prefer to concentrate on what I can do now than what I should have done .

There is a clause in the special conditions stating that we are liable for any tenancy arrears (apparently the tenant hasnt paid the rent for 6 months). And we are liable for this as well. Came through in the completion statement from the seller's solicitors.

The property was marketed as getting a rent and let on AST for 12 months of which 6 months have passed.

Is there a case for us to sue for misrepresentation in the courts and claim the rent arrears we have to pay to complete now.

Property Price 150k
Deposit Paid 15k
Property Value 165k (open market)

Rent Arrears 6k
Eviction Costs - Not known

As the tenant is a single mother with one child, what are my chances of evicting the tenant assuming they havent paid. This is only if I have purchase the property and not lose my 15k. In either case is it better to complete and sue for misrepresentation?

Is there even a case for that given that there was a clause, I had read this clause as tenancy arrears for the last month but its probably covering them for all of the rent. Have they 'created' a tenancy to bump up the price when really there wasnt a paying tenant and it has helped them to 'sell' the property at a good price and get me to pay for it as well.


Newbee

squeeks

Your solicitor will be able to give you your options.

From what you have described you should be able to start the eviction process if no rent has been paid, but as far as I am aware you are going to have to go through the court process, unless the tenant decides to up and leave of their own accord (you can't assist in this!).

As for the notes etc.. any checks you wanted to do on the property you should have done prior to biding. iirc if you fail to complete before the deadline you loose the deposit you have already paid and there may be other clauses; so check your auctions legal pack. In this case with the liabilities (such as due rent, and court costs) it may be worth while, do the sums.

Ask your solicitor before you complete. Either way it is probably going to be little more costly than you anticipated.

*edit
As you are potentially becoming a landlord and taking over someone else's AST contract. Make sure the usual landlord requirements are met. i.e. deposit in a recognised scheme (that you can take over), gas checks up to date etc.. so things don't get any more messy...

Yorkie1

As far as I am aware this would have been in the legal pack available pre-auction. You will have been deemed to have read and accepted these terms when you bid, so I doubt you will be able to do anything about it. You could have chosen not to bid if the terms weren't acceptable.

The only potential way out might be if there was absolutely no way that you could ever have known about this clause pre-auction and therefore there is some mis-representation. But auctions are different things from a usual purchase so, as others say, your solicitor will have to be your guide.

koradma

squeeks wrote: »

*edit
As you are potentially becoming a landlord and taking over someone else's AST contract. Make sure the usual landlord requirements are met. i.e. deposit in a recognised scheme (that you can take over), gas checks up to date etc.. so things don't get any more messy...

Squeeks

The flat has electric hobs and no deposit was taken at the time of tenancy hence no tenancy deposit schemes etc. That also tells me this was designed to be sold off in an auction.

No gas checks are applicable. We are trying to find out from the tenant if they were ever asked for a rent at any point in time. Possible for a case for misrepresentation.

Will consult lawyer and you are right the costs are higher than expected.

Am wondering if I should forfeit 15k + fees already paid(not complete) vs 6k in additional rent(complete) . I can always make the 6k back once the flat is rentable. We have verified locally with estate agents we should get around 1k per month in rent for this place.

Much appreciated.

G_M

koradma wrote: »

...I should have done the checks before hand,correct.

There is a clause in the special conditions which of course you read.....stating that we are liable for any tenancy arrears (apparently the tenant hasnt paid the rent for 6 months). And we are liable for this as well. Came through in the completion statement from the seller's solicitors.It was in the special conditions - you 'legally' were aware therefore.

The property was marketed as getting a rent and let on AST for 12 months of which 6 months have passed. & this appears accurate?

Is there a case for us to sue for misrepresentation in the courts and claim the rent arrears we have to pay to complete now.on what grounds...?

Property Price 150k
Deposit Paid 15k
Property Value 165k (open market)

Rent Arrears 6k
Eviction Costs - Not known

As the tenant is a single mother with one child, what are my chances of evicting the tenant assuming they havent paid.
If there are arrears of 2 months at the time you issue a S8 Notice, AND at the time of the subsequent court hearing, then the court MUST award you possession.
This is only if I have purchase the property and not lose my 15k. In either case is it better to complete and sue for misrepresentation?
You agreed to buy the property. Legally. So buy the property. There was no misrepresentation.

Is there even a case for that given that there was a clause, I had read this clause as tenancy arrears for the last month but its probably covering them for all of the rent. If you misunderstood the clause, that is your problem, not the sellers!Have they 'created' a tenancy to bump up the price when really there wasnt a paying tenant How? They could have got a better price with NO tenant.and it has helped them to 'sell' the property at a good price No. A vacant property will always get a better price than a tenanted one.and get me to pay for it as well.


Newbee

Anyone buying a tenanted property has to fully investigate that tenancy. Otherwise..... well, you've found out what can happen!

kingpin1

that really does not seem much of a reduction of price for a auction propert with tenant in situ are you sure your not pessamistic abt the value as you are now having second thoughts and would rather lose the deposit? id be inclined to use a specialist to evict her if you do that route

tim123456789

G_M wrote: »

Anyone buying a tenanted property has to fully investigate that tenancy. Otherwise..... well, you've found out what can happen!

though being expected to hand over to the seller an amount to cover tenants arrears accrued before exchange date is pretty uncommon!

koradma

G_M wrote: »

Anyone buying a tenanted property has to fully investigate that tenancy. Otherwise..... well, you've found out what can happen!

Your responses very clear to my questions raised. Thank you.
As i am taking on the rent arrears and its already due for 6 months. Can i evict her straight away or do i have to wait another 2 months before I can do this.

Any ideas on the costs of evicting. Would be helpful as well please.

Much appreciated.

koradma

tim123456789 wrote: »

though being expected to hand over to the seller an amount to cover tenants arrears accrued before exchange date is pretty uncommon!

Exactly my question, I can understand this is not common in a normal purchase. But by buying this in an auction. Does it make it legitimate ? Can I challenge this with the seller.

koradma

kingpin1 wrote: »

that really does not seem much of a reduction of price for a auction propert with tenant in situ are you sure your not pessamistic abt the value as you are now having second thoughts and would rather lose the deposit? id be inclined to use a specialist to evict her if you do that route

Kingpin

Its got a great rent potential for the price paid. Also I am being a bit cautious on the value. It may be worth another 5-10k more. Also its in a great location with great schools and transport links nearby.

Also these are very rare coming onto the market. It doesnt look that attractive now I agree with the additional matters/costs to deal with

kingpin1

hi yes im guessing unless hmo youl get a about 850 with mortgage abt 420? their are some good companies that serve i think a sec 8 and 20 and instruct a bailiff all for about 600? it was a while ago i looked into it but thats off top of my head