Vendor is renting flat back from us after we complete purchase - utilities query

Sunshine2000

We're about to complete on a flat but have agreed that the vendors don't have to move out until 4 weeks after completion while they have work done on their new property (we don't need to move in straight away). They will be paying us rent for this period (with formal rental contract). Can anyone see any potential problems if we delay getting council tax, electricity, phone, water etc. changed into our name until 1 month after we've actually purchased the property? Seems simpler to do it this way as the vendors will remain liable for the bills, but will it cause any confusion or legal issues? We are on good terms with the vendors. Any advice much appreciated!

Annisele

Does your solicitor know about this plan? And are you buying with a mortgage?

It sounds to me like a *very* bad plan, but how bad it is depends on the above two questions.

Sunshine2000

Solicitor is aware and has no major issues. No mortgage involved - we are paying cash.

tim123456789

Sunshine2000 wrote: »

We're about to complete on a flat but have agreed that the vendors don't have to move out until 4 weeks after completion while they have work done on their new property (we don't need to move in straight away). They will be paying us rent for this period (with formal rental contract). Can anyone see any potential problems

Yes the six months security of tenure that your "tenants" will have before you can forcibly evict them if they change their mind

don't do it.

tim

ValHaller

There are a lot of pitfalls with this. In your position, I would be putting a hefty retention in place, say 5%. Really the problem exists with the property your vendors are buying, so why should you be taking up the slack. No doubt the vendors are currently motivated to be on good terms with you. But what happens when their project is delayed for 5 weeks ?????

Annisele

Ok then. With a mortgage your plan would be pretty much impossible (with a residential mortgage you'd need vacant possession to complete, and you couldn't get a buy-to-let mortgage if you intended to live there). Without a mortgage, it might be possible - but I still think it's a very bad idea.

I'm not a lawyer, but I can't see any problems delaying transferring council tax, electricity etc into your names.

I can however see *major* potential problems with the plan as a whole. What will you do if the vendors don't leave after four weeks? Assuming you're in England and you've agreed an assured shorthold tenancy, it's unlikely you'd be able to evict them for the first six months of their tenancy.

You'd be responsible for all the things landlords are usually responsible for (gas safety certificates, tax, repairs etc).

Will you be taking a deposit? If so, you'll have to protect it properly. If not, what will you do if the vendor damages the house? Will you be getting a dual signed inventory on completion day?

bitsandpieces

Leaving utilities etc. in the vendors'/tenants' names seems sensible. However, have you thought about what happens if - for example - repairs drag on and they choose not to move out for 4 months?

PasturesNew

If a seller stays in the house, they're protected by some newer legislation. If they didn't move out, it's a lot longer than 6 months to get them out; it might be 5 years as they're "more protected" because it used to be their home. Not got a link, somebody will have one....

Lizzie-S

I have to say that this is a road I would not like to travel down. It may be fine, but I would not entertain it. If their property is not ready for 4+ weeks, then that is their problem. Personally, I would say 'sorry, something has come up and we HAVE to leave our current property on the day of completion.'

Annisele

PasturesNew wrote: »

If a seller stays in the house, they're protected by some newer legislation. If they didn't move out, it's a lot longer than 6 months to get them out; it might be 5 years as they're "more protected" because it used to be their home. Not got a link, somebody will have one....

You're right; I'd forgotten about that. I don't have a link either, but a google for "sale and rent back" might be fruitful for the OP.

bitsandpieces

Actually, is there a reason not to just have 4 months longer between exchange and completion?