Buying a house that has tenants in it

kwmlondon

ruggedtoast wrote: »

People are beastly on the internet aren't they?

You should see what would happen if you asked this question over on the forum hpc.co.uk.

I think the problem in your scenario is that you have split accountability. If the tenants have a valid AST then that trumps your right to move in, even if you have just bought the property. You are now their landlord and getting them out is your problem.

Although threatening to sue people which ways from Tuesday sounds great on American TV and internet forums, if you live in the UK you will find trying to actually do this a very lengthy and potentially costly process; especially if the other party vanishes or turns out to be skint.

Make sure they're out mate.

I know, but it only makes me laugh when they're nasty. It's usually my mum trolling me anyway... She's ruder than anyone out there.

I think my mistake was carrying on the thread in a "what would happen if..." and people not getting that.

I've long since come to the conclusion that I need to check vacancy before handing over any money. I've taken advice from here AND checked with my own EA (I've used them before) and my conveyancers before making my mind up.

However, it opened up a big question which goes beyond my situation which is "how can you be sure when you turn up at a property you've bought that it will be empty for you to move into?"

It had never occurred to me before, and I bet it's only on many people's radar now because I brought it up.

I was looking at a thread earlier where someone was buying a flat off a couple who were divorcing and it fell through. What would happen if the house was in one person's name and when they sold it the other person refused to move out so when you turned up on the moving in day there was someone there with all their furniture?

I was just curious and the only answer I can find is that your fallback is your solicitor. You pay them to assist you in situations like this. I found that reassuring and useful to know.

DRP

kwmlondon wrote: »

Personally, I don't care what agreement the tenants have. The only thing that matters to me is that they are out of there when I exchange contracts. All the rest is just an academic discussion.

I won't allow my solicitors to pay over any money until the property is empty so it's 100% between the landlord/seller and his tenants.

If he fails to get them out then the sale doesn't happen. I am prepared for this risk, but I really think it's a small one, and no more than buying any property as I've seen on this forum - plenty of people have sales fall through.

well, here's a question for you:

what if the tenants have been illegally excluded/chucked out when you buy the house and move in?

will you (as you will be the current LL) be held responsible?

ie showing up in court, returning deposits, giving them an alternative place to live etc ?

ruggedtoast

kwmlondon wrote: »

I know, but it only makes me laugh when they're nasty. It's usually my mum trolling me anyway... She's ruder than anyone out there.

I think my mistake was carrying on the thread in a "what would happen if..." and people not getting that.

I've long since come to the conclusion that I need to check vacancy before handing over any money. I've taken advice from here AND checked with my own EA (I've used them before) and my conveyancers before making my mind up.

However, it opened up a big question which goes beyond my situation which is "how can you be sure when you turn up at a property you've bought that it will be empty for you to move into?"

It had never occurred to me before, and I bet it's only on many people's radar now because I brought it up.

I was looking at a thread earlier where someone was buying a flat off a couple who were divorcing and it fell through. What would happen if the house was in one person's name and when they sold it the other person refused to move out so when you turned up on the moving in day there was someone there with all their furniture?

I was just curious and the only answer I can find is that your fallback is your solicitor. You pay them to assist you in situations like this. I found that reassuring and useful to know.

Then you would be a "displaced residential occupier" and the police 'should' remove them.

If they have a valid AST for that address though, then you are stuck going through the courts and trying to claim separately from the previous owner.

I doubt its happened very often as trying to buy a tenanted house is no mean feat; even getting access is hard; I should imagine most people would insist on seeing it vacant and empty before exchanging.

kwmlondon

DRP wrote: »

well, here's a question for you:

what if the tenants have been illegally excluded/chucked out when you buy the house and move in?

will you (as you will be the current LL) be held responsible?

ie showing up in court, returning deposits, giving them an alternative place to live etc ?

No, as the buyer I would not become their landlord. When the seller signs the document to sell the property there is a straight-forward option which is "sold as vacant" or "sold with possession". Or similar wording.

I have a legally binding contract with them and in law I am buying a place without anyone in it.

The legal nightmare if they have assured tenancy, I dread to think, but you'd have to be mad to sell somewhere as vacant when it had tenants. Also, bear in mind that on the day of completion the money is paid over to the sellers conveyancers. I wonder if there's any kind of way of preventing it going on to the seller if they are in breach of contract.

Just to reiterate, before someone has a go at me again, I'm going to be viewing the house I'm buying before I allow my solicitor to exchange contracts. I want to see the place empty before I hand over any money.

G_M

DRP wrote: »

well, here's a question for you:

what if the tenants have been illegally excluded/chucked out when you buy the house and move in?

will you (as you will be the current LL) be held responsible?

ie showing up in court, returning deposits, giving them an alternative place to live etc ?

Interesting question! (but, OP, largely academic).

If the tenancy has not ended, the the new owner becomes the landlord and takes responsibility.

Of course, he can take action for compensation against the old owner/landlord who deceived him, but meanwhile does have to deal with the tenancy as a landlord.

So the Q is, has the tenancy ended?

Certainly, if the old owner/LL has illegally evicted the tenancts, then yes, the tenants can
a) sue (Housing Act) and
b) bring criminalcharges (Protectionfrom eviction Act)

but in both these cases the action (suing for damages and prosecution for illegal eviction) would be against old LL.

But the tenants could also demand to be re-admitted to their property to continue their legitimate tenancy. This would affect the new owner/LL.

Whether a court, given all the circumstances, would order this, I don't know. The court may require the old LL to supply alternative accomodation for the remainder of the tenancy, or to compensate the tenants for on-going hotel costs etc.

But it would be a concern and (small) risk to the new LL/owner.

G_M

kwmlondon wrote: »

No, as the buyer I would not become their landlord. When the seller signs the document to sell the property there is a straight-forward option which is "sold as vacant" or "sold with possession". Or similar wording.

I have a legally binding contract with them and in law I am buying a place without anyone in it.

The legal nightmare if they have assured tenancy, I dread to think, but you'd have to be mad to sell somewhere as vacant when it had tenants. Also, bear in mind that on the day of completion the money is paid over to the sellers conveyancers. I wonder if there's any kind of way of preventing it going on to the seller if they are in breach of contract.

Just to reiterate, before someone has a go at me again, I'm going to be viewing the house I'm buying before I allow my solicitor to exchange contracts. I want to see the place empty before I hand over any money.

Not so simple.

Yes, you have a contract with the seller.

But seller has contract with the tenant.

Seller may breach their contract with you (ie not sell 'with vacant possession') for which you can claim damages, but that does not negate the tenants rights!

kwmlondon

G_M wrote: »

Not so simple.

Yes, you have a contract with the seller.

But seller has contract with the tenant.

Seller may breach their contract with you (ie not sell 'with vacant possession') for which you can claim damages, but that does not negate the tenants rights!

But this could be the case with anyone buying a property couldn't it? How does anyone know what existing contracts are in place with current/previous occupants of a property?

G_M

kwmlondon wrote: »

But this could be the case with anyone buying a property couldn't it?
correct
How does anyone know what existing contracts are in place with current/previous occupants of a property?

They
a) look (presence of tenants increases the risk!) &
b) rely on the contract (vacant possession)

With any legal contract, whether a house purchase, holiday booking, insurance etc, there is a risk that one party may breach the contract. The hotel may turn out NOT to be 5*, the insurer may refuse to pay out on a claim.

Or the seller may turn out to have an ongoing tenancy in existance.

In these cases, the other party sues for damages.

This applies just as much to property purchase as any other contract. The difference is that the costs of breaches are high, and the inconvenience (it's your home!) is also high.

kwmlondon

I mean, there's absolutely NOTHING anyone can do to ensure this isn't the case is there?

In my case I'm not too worried as the landlord simply has to give notice to the current tenants with a date just before the completion date. If that was a month or two months it would make little difference to him as he'll be getting rent up to that point so it's not really in his interests to try to let me move in before the tenants are out.
I've been in while the tenants are there, they know full well that the place is being sold, I guess if they had no intention of leaving they would have said!
If they are not out by the time I move in he'll be in real trouble and will have to shell out money for solicitors and suchlike when all he has to do is wait until they've left and then he'll have a trouble-free sale?

And - this is the clincher - the house was last sold in 2004 so the tenants would not have been there since 1997 (they're only in their early 30s anyway so could not have been).

I will inspect the place before I exchange contract thus ensuring that there is nobody living there before I move in. Is there anything more I COULD do to protect myself?

kwmlondon

G_M wrote: »

They
a) look (presence of tenants increases the risk!) &
b) rely on the contract (vacant possession)

With any legal contract, whether a house purchase, holiday booking, insurance etc, there is a risk that one party may breach the contract. The hotel may turn out NOT to be 5*, the insurer may refuse to pay out on a claim.

Or the seller may turn out to have an ongoing tenancy in existance.

In these cases, the other party sues for damages.

This applies just as much to property purchase as any other contract. The difference is that the costs of breaches are high, and the inconvenience (it's your home!) is also high.

Well, I'm going to add another reality check to this (all interesting points by the way, thanks) which is this is London. It's not that great a house (needs quite a bit of work doing). They'll be able to find another property without too much trouble.