Implications of granny flat/annex for house purchase

Goldfish52

We have had an offer accepted on a house which has an annex/granny flat to the rear with its own access. We originally believed that this was lived in by a family member of the vendor, but found out today that it is actually tenanted. Worryingly, the vendor has stated on the property information form that the house is being sold without vacant possession! The vendor has already proven to be a bit sneaky and I suspect he has not given notice to the tenants (possibly not even told them the house is for sale as there is no sale board outside the property) and wants a rental income from it for as long as possible. We really like the house, which is in a good area with bags and bags of potential so don't want to walk away.

We don't want to inherit tenants and my understanding is that this would cause problems with the lender in any case. Could I please have some advice as to
1. How this is likely to affect our mortgage application (approved subject to survey with HSBC)?
2. Is there anything else we need to consider with this situation?

DRP

I don't think you can get a 'normal' residential mortgage with the tenant there.

Don't spend any more money (fees etc) until the flat is proven vacant. i.e. you need to properly clarify this situation before continuing...

dimbo61

Be aware you will also have to pay council tax Band A for the annex IF the vendor got planning permission !
Has he got building regs for the work done ?
Can of worms I think

dancingfairy

Run away! Fast. This sounds like a complete nightmare. Potentially 2 lots of council tax for a start off.
If you manage to purchase a property with a tenant in situ then I think you'd become their landlord and be responsible for things like any gas safety certificates, registering their deposit etc etc.
Also your mortgage lender may well baulk as well.
Current owner is responsible for giving vacant possession. If he has protected the deposit and gets the notice right and it's a rolling tenancy then you are looking at 2 months notice, plus waiting time for it to go to court, plus time to appoint bailiffs etc etc so it could take ages for him to get the tenant out. It could be worse though, if the deposit wasn't protected or the tenant is a fixed term or he messes up serving the notice it could take forever to get the tenant out.
If the vendor is messing you around/keeping you in the dark I'd run away.
df

Goldfish52

Kind of suspect it's a no on the building regs etc as he has stated no to any building works on the property information form. :undecided
We really want the house and I can see it is going to be a world of pain but would love advice as to whether it's possible at all!

xylophone

to be a world of pain

And you'd need to be a masochist to take this on?:eek:

00ec25

Goldfish52 wrote: »

would love advice as to whether it's possible at all!

of course it is possible, but it will require:
1. probably having to get a different type of mortgage as your lender at the moment believes it is securing against the whole property over which no one else has a claim
2. you taking over all legal responsibilities of a LL incl responsible for any deposit already paid by the T, gas safety and repairing obligations to name but a few
3. sorting out the council tax position which may or may not have been declared and may or may not be contingent on exemption being wholly dependent on the annex being used by a m,ember of the family only
4. sorting out whether planning permission was given (and thus the transparency of the annex to the VOA for council tax purposes) and building regulations adhered to
5. (considerable) extra expense whilst your solicitor does lots of extra work if vacant possession is not given

dancingfairy

Assuming you don't want to be a landlord your first worry is the tenant. You only need vacant possession but if you are clued up about how the landlord would give notice and the process to get the tenant out at least you will know what's going on. First off you want to know what sort of tenancy was signed - 6 months? 1 year? Nothing :eek: Is the tenant still in the fixed term or have they now moved to a rolling contract? Has the landlord served the correct notice (most likely to be a S21 no fault notice)? When was it served? Was the tenants deposit protected? Once you know more then people can advise you further on that aspect. It would be wise to chat to the tenant as well. Are they willing/able to move out under their own steam or will they be applying for emergency housing and in it for the long haul? Are they the type of tenant who is likely to go without a fuss and not cause damage?
Assuming that you believe the landlord has served the correct notice and has a good chance of securing vacant possession the next thing is council tax.
if the VOA have been informed and assessed the situation and decided it is 2 dwellings then you will be responsible for 2 sets of council tax until you join the 2 together. The VOA will look at things like access to the annex (does it have it's own access?), bathrooms, kitchens etc. You may need to remove any bathrooms/kitchens in the annex and knock walls through/brick doors up to make it 1 house in the eyes of the VOA. Obviously you should factor the cost of this work into any offer you make.
Check the VOA website. If there are not 2 properties there then a) the VOA has decided it's 1 property or b) they don't know about it. If they don't know about it, what other corners has the vendor skipped?
It's doable but will require you to jump through many hoops and may involve building works.
df