Buying a house that currently has tenants

GracieP

I'm quite interested in a house which is on the market for sale but is currently rented out. The house ticks a lot of my boxes and though I haven't yet fully decided whether to make an offer or not, I'm concerned about the fact that is currently rented out.

Is it feasible to come to an agreement whereby I formally make my offer based on vacant possession and we exchange contracts, following the usual survey/legal searches, but then hold off on completion until the tenants reach the end of their lease and have moved out later in the year? I have absolutely no interest whatsoever in becoming a temporary landlord but for the right price wouldn't mind committing to buy then waiting until the house was vacant to buy it.

I'm sure there are lots of problems with my plan that I haven't thought of.

Kynthia

Do not under any circumstances exchange without vacant possession. You will be committed to complete with a mortgage that won't allow you to.


You will need more information first such as is the seller happy to evict their tenants or where they planning to sell to a landlord? Are the tenants in a fixed term contract and if so when does it end?

GracieP

I'd be a cash buyer. Does that make a difference?

The vendor has to sell the house as they are in arrears (they'd intended to knock the house and develop the site but ran out of financing) and the bank is insisting they sell. The property has been on the market over a year (the property market is practically dead in this area) so the vendor let it in order to bring some money in. The tenants have a fixed term ending in September.

I know that it's possible that the tenants would refuse to move at the end of their tenancy and then a whole eviction process would have to start, delaying things further and with the potential to get really messy. But at the same time I'd hate to agree a price with the vendor, then wait 7/8 months in order to buy all the while being at risk of being gazumped.

I'm going to spend the next few weeks looking at every other house that has even the remotest potential. Maybe I'll find something I like better and will just walk away from this one, as I like the house but it's a hot mess.

G_M

Very unwise to Exchange contracts without an agreed, fixed Completion date. Yes, that date can be a week later, a month, or 6 months, but you need a date.

And there is no way of knowing when the tenants will leave. Whether they will fight, and wait for court bailiffs.

Because of those two criteria, you should not exchange till
a) the tenants have left
b) you have personally checked they have left AND
c) you've seen documentation that the tenancy has ended (not the same as tenants leaving - they might be coming back!)

franklee

GracieP wrote: »

I'd be a cash buyer. Does that make a difference?

Yes given you won't have any of the restrictions a lender would impose you can buy the property with the tenants still there if you want. You would become their landlord and could evict them when the time comes.

GracieP wrote: »

The vendor has to sell the house as they are in arrears (they'd intended to knock the house and develop the site but ran out of financing) and the bank is insisting they sell.

So how long is the bank prepared to wait? They wouldn't be selling the house and repaying the bank any time soon if completion is delayed till September + maybe up to six months to evict the tenants.

If you went for your plan of a delayed completion what would happen if the bank repossess in the meantime or if the vendor doesn't full fill his landlord obligations e.g. to do repairs, protect the deposit and to do the eviction properly. At what point would you be free to walk away if you have already exchanged and it all drags on too long?

getmore4less

An owner/LL with no money.

How will they afford to evict anyone?

poppysarah

If tenants are told to stay put until they are actually evicted in order to get rehoused then thats what they'll do.

jamie11

You could make a very low offer to take it as it is and then evict at leisure, with a S21 properly served you are bound to have possession within a few months no matter how they drag things out.

If you do that though be careful to check about the deposit and CP12 etc, you don't want to buy problems.

roger196

What sort of tenancy is there. ?AST or what, any rights of renewal ? Have you inspected the tenancy agreement? Do the tenants agree that it is an AST.
As the bank will know they will get much more for vacant possession, why have they not started the process? I would only touch this with a completion date set in the contract with the right to withdraw, with the return of my deposit, if verfiable vacant possession is not given.