Buying a house that has tenants in it

DaftyDuck

Since this has turned into a more amicable "what if" thread, I'll mention a story an EA told me about five years ago, when I was looking for a house with a Granny Annexe, with a view to my aged (sadly now deceased) ma moving in if necessary. Probably an Urban myth (well, rural myth, maybe), but...

Said agent related a tale of a house/annexe sale going through in a Suffolk village, and during the new residents removal men filling the house, when offered refreshments they commented that the nice old lady had already given them a cup of tea. New occupiers assumed it was a helpful neighbour. Nobody in house, or in annexe. A few days later, they found they'd left a door open they were sure was closed... and onward for a few more similar incidents.... dog let out, rubbish in bin...
Turned out the family + ma who had lived there had moved across the road, and the elderly lady could never remember she'd moved out, and kept letting herself in, making a cup of tea etc.

I didn't follow up any details, but I'd guess there was no legal recourse there.

I do know for fact that when moving into my current house we exchanged at lunchtime, and turned up to collect keys from the agent. He delayed, (someone gone to collect keys from seller... other agent then had to meet that agent... blah blah..).

Turned out the daughter of the lady living here refused to move out and had handcuffed herself to the railings! The local PCSO told me this tale as she had to attend the scene to ensure nobody was hurt. We only got in the house around 5pm, so there were obviously "complexities"

kwmlondon

DaftyDuck wrote: »

Since this has turned into a more amicable "what if" thread, I'll mention a story an EA told me about five years ago, when I was looking for a house with a Granny Annexe, with a view to my aged (sadly now deceased) ma moving in if necessary. Probably an Urban myth (well, rural myth, maybe), but...

Said agent related a tale of a house/annexe sale going through in a Suffolk village, and during the new residents removal men filling the house, when offered refreshments they commented that the nice old lady had already given them a cup of tea. New occupiers assumed it was a helpful neighbour. Nobody in house, or in annexe. A few days later, they found they'd left a door open they were sure was closed... and onward for a few more similar incidents.... dog let out, rubbish in bin...
Turned out the family + ma who had lived there had moved across the road, and the elderly lady could never remember she'd moved out, and kept letting herself in, making a cup of tea etc.

I didn't follow up any details, but I'd guess there was no legal recourse there.

I do know for fact that when moving into my current house we exchanged at lunchtime, and turned up to collect keys from the agent. He delayed, (someone gone to collect keys from seller... other agent then had to meet that agent... blah blah..).

Turned out the daughter of the lady living here refused to move out and had handcuffed herself to the railings! The local PCSO told me this tale as she had to attend the scene to ensure nobody was hurt. We only got in the house around 5pm, so there were obviously "complexities"

Good lord!

franklee

kwmlondon wrote: »

Good lord!

kwmlondon, If you're really interested in how stressful it can get when the seller refuses to move have a read of this classic from Welshwoofs:

Vendors pull out AFTER exchange of contract
https://forums.moneysavingexpert.com/discussion/comment/23181761#Comment_23181761

So it does happen but it's rare that someone who has decided to sell their home and gone past exchange of contracts will pull out. However with a tenanted property the tenant may not want to move or perhaps cannot afford to move.

You still seem to think the tenant will be gone in two months max, this is not necessarily so. If they want to delay or if they qualify for council housing they must not make themselves voluntarily homeless so will stay until the full eviction process is gone through. This can easily be six months from when notice was first served, or more if the landlord makes nay mistakes in his paperwork, which is surprisingly common.

Can you afford to wait for exchange of contracts that long? Things that may happen while you wait:
1. Your mortgage offer runs out and criteria change so getting a new one is hard.
2. You have to leave your existing accommodation.
3. If you are selling as well your buyer drops out.
4. House prices go up (or down) and either side wants to adjust the price.
5. The tenants damage the property.
6. The tenants or landlord haven't been paying rent or mortgage and the property gets repossessed.

If you really must proceed with this one, talk to the tenants try to get a feel for if they are moving anytime soon.

grifferz

kwmlondon, the reason why people are still going on about this (excluding the trolls and other Internet predators that just enjoy sticking the boot in from the safety of their armchairs), is that buying a tenanted property is risky and you've given the impression that you are being complacent. So, (some) people are actually trying to help you out here.

You keep saying that you've got it and you will check the place is vacant before you exchange. That is very sensible. It's the other bits where you say about how if it's not then you'll have your solicitor on the phone to theirs and have it all sorted out quickly.

As others have tried to point out, it may not be that simple. Yes, it could get costly for your vendor if they fail to get vacant occupation at the time you want to exchange. But that doesn't directly help you, it just harms them.

A problem is that your vendor doesn't sound like a very clued up landlord (one month of notice is not possible) and may make a mistake in getting these tenants out. If you are sensible about things and can in the worst case stand a large delay (months) in the event that getting the tenants out proves difficult then you should be okay.

Good luck! We always like to hear on these threads how it all turned out, so do please follow up.

real1314

kwmlondon wrote: »

I don't understand why the bile. Are you okay? Do you need to talk to someone? When I'm angry and rude to people it's usually because there's something bad going on in my life so I'll just say I hope you sort it out and that things get better for you.

Big hug.

You haven't grasped the point that it DOES matter what contract the tenants have got and it DOES matter if they have not left the property on the correct basis.

Let's say the exchange is 7 days before completion.

Seller says - "it's ok, they've left but they've left furniture behind"; you & solicitor agree and exchange.

On completion, they've returned from a few days away and are sat at home.
You've completed based on vacant property.
You're deep in it.

Incidentally, you asked what if another person living with a standard seller remained in the property - they would have no right of residence and could be treated as a squatter.
A tenant remains a tenant unless they have surrendered the tenancy - thsi can be done on a witnessed statement (via a solicitor is best) or has been evicted by the courts and the eviction has been effected.

I'd ask the seller to get a solicitor notified surrender prior to completion.:cool:

G_M

kwmlondon wrote: »

I mean, there's absolutely NOTHING anyone can do to ensure this isn't the case is there?
No

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.
But as people keep trying to tell you, a LL giving notice is NOT the same thing as a tenant leaving. They don't have to. That is the law. The have the right to stay even if the LL has given notice
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.
if the owner/LL is trying to maximise his rental income before the sale, by timing the notice just before Completion, there is a high risk the tenants will still be there on Completion

You must not Exchange before checking the tenants have left.
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!
1) why? if they plan to ignore the notice they are given, they are unlikey to give advance warning of this
2) they intend to leave, but what if they can't find somewhere to go? Or it falls through at the last minute?

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?
he may
1) be ignorant as to the tenants' rights (as you seem tobe) and assume they will leave when asked
2) he may be gambling - maximising his rent and counting on them leaving

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).
OK - they are not Assured tenants. But they still do not have to leave simply on being issued 'notice'. Tenancy law.

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?

I wonder if you fully understand the difference between 'exchange' and 'Completion'?
You must ensure that there is nobody living there before you Exchange.

kwmlondon

franklee wrote: »

kwmlondon, If you're really interested in how stressful it can get when the seller refuses to move have a read of this classic from Welshwoofs:

Vendors pull out AFTER exchange of contract
https://forums.moneysavingexpert.com/discussion/comment/23181761#Comment_23181761

So it does happen but it's rare that someone who has decided to sell their home and gone past exchange of contracts will pull out. However with a tenanted property the tenant may not want to move or perhaps cannot afford to move.

You still seem to think the tenant will be gone in two months max, this is not necessarily so. If they want to delay or if they qualify for council housing they must not make themselves voluntarily homeless so will stay until the full eviction process is gone through. This can easily be six months from when notice was first served, or more if the landlord makes nay mistakes in his paperwork, which is surprisingly common.

Can you afford to wait for exchange of contracts that long? Things that may happen while you wait:
1. Your mortgage offer runs out and criteria change so getting a new one is hard.
2. You have to leave your existing accommodation.
3. If you are selling as well your buyer drops out.
4. House prices go up (or down) and either side wants to adjust the price.
5. The tenants damage the property.
6. The tenants or landlord haven't been paying rent or mortgage and the property gets repossessed.

If you really must proceed with this one, talk to the tenants try to get a feel for if they are moving anytime soon.

Okay, thanks for these points. First, the nightmare of the sale crashing AFTER exchange of contracts looks like something that could happen to anyone buying any property. Nightmare but surely a risk you have to take if you buy a property.

1. The mortgage offer runs out. Unlikely, but I'll speak to my IFA if it looks like becoming an issue, however, if I have to rearrange then it should be do-able.
2. I'm selling my flat so that's not a problem.
3. If my buyer drops out I'll put it back on the market. I'm in a part of London where the market is good, the day I put it on I got 3 viewings, it was sold in less than a week. It would be a pain, but nothing I could not arrange.
4. Price adjustments? Could happen to any buyer/seller in any situation, I'll just have to deal with it as it arises.
5. The place is a s**thole. It needs a lot of work, that's the basis on which I'm buying it. I will want to inspect it after the tenants have left a) to make sure it's vacant and b) to make sure they've not seriously damaged the place. Will do this before exchange of contracts.
6. Well, if the repossession issue is one that any buyer is facing isn't it?

I am absolutely going through with this. The main risk, as I see it, is that the whole process gets drawn out. I can live with this as I'm secure in my property. Do I want to contact the tenants directly? Hmm, not sure I'm comfortable with that, will have to think about it, but I appreciate your suggesting it. Thanks.

kwmlondon

real1314 wrote: »

You haven't grasped the point that it DOES matter what contract the tenants have got and it DOES matter if they have not left the property on the correct basis.

Let's say the exchange is 7 days before completion.

Seller says - "it's ok, they've left but they've left furniture behind"; you & solicitor agree and exchange.

On completion, they've returned from a few days away and are sat at home.
You've completed based on vacant property.
You're deep in it.

Incidentally, you asked what if another person living with a standard seller remained in the property - they would have no right of residence and could be treated as a squatter.
A tenant remains a tenant unless they have surrendered the tenancy - thsi can be done on a witnessed statement (via a solicitor is best) or has been evicted by the courts and the eviction has been effected.

I'd ask the seller to get a solicitor notified surrender prior to completion.:cool:

I take your points, thanks for that.

At this point I'm waiting to hear on a date for exchange of contracts. I spoke to my solicitor today and she was helpful, I'm going to come back to her once I've got a date for completion.

However, as useful as your points are all this stuff is very much worse case scenario. I absolutely take on board that I need to have this in mind, but I'd like to speak to the seller's EAs and see what they tell me is happening. I will, of course, treat it as possibly being total c**p but I do want to know what the seller is saying.

I agree, he's probably going to want to maximise his rental but on the other hand I have to conclude that he's not going to want to risk having a legal nightmare on his hands by having the tenants in when I go to move in.

Yes - I know what you are going to say, he may be an idiot or nearly bankrupt or something.

At the moment I can pull out and will be able to until exchange of contracts, once it's gone further down the process I will feel more able to impose some conditions.

I'll keep you all posted!

kwmlondon

G_M wrote: »

I wonder if you fully understand the difference between 'exchange' and 'Completion'?
You must ensure that there is nobody living there before you Exchange.

Yes, I've done this before, but please feel free to treat me like an idiot. I fully admit that there's a lot at stake and that I'm in unchartered territory here all thoughts are appreciated. I may have my faults but I would rather look stupid and admit I'm wrong than make a huge mistake.

However, I accept the risks of buying a property that has tenants in it at the moment and am 100% committed to getting this house. If you can accept that I will take on that risk then feel free to offer any advice you are happy to share.

fc123

Hope your sale goes through OK.

We have a similar problem as our exchange has been delayed as turns out the tenant hasn't moved out.

The LL is not the brightest button and we thought the house was an HMO...however the search didn't show up that is was a licensed HMO. It was 5 rooms with 4 tenants in situ. 3 have left.

The last tenant has extreme drug dependency issues and doesn't want to move out unless LL gives him a wad of cash and a letter saying the house is sold.

The vendor has told us that the tenant will leave next Tuesday as he will give him his letter and his wad.....so we will go down, check he has left, oversee locks being changed and then exchange.

I have a feeling that the vendor has proably not done things as they should be done and now it's bitten him on the a**. He is desperate to sell, there is no mortgage involved...and we are being very very tolerant in the circumstances.

This LL owns a further 8 HMO's and rehoused the other tenants but refused to rehouse this one as 'he's trouble' (so he said). Not the smartest move on his part. He also said about the months notice which I thought was dodgy but could be if it's an HMO?