Buying a house with tenants in - how?

Cuilean

Hubby and I have finally found "the house". Absolutely perfect, ticks every item on the wishlist, perfect location, within budget, etc. There's only one issue - it's currently let until June 2015.

This hasn't really worried us on a superficial level. We've said we're happy to go into short-term rented accommodation if need be. We've not sold our current house yet, although we're due some second viewings today, so we're in no hurry. The landlord of the house we love lives abroad, and according to the agent "Is not especially desperate for a fast sale" either.

I'd like to know if anyone has any experience of how buying a rented house works, or what might happen if we make an offer on the house. What questions should we be asking? Obviously we couldn't take possession until June. The agent was talking about exchanging but delaying completion being an option, but I get the feeling that's only one of many ways it could happen.

pinkshoes

DO NOT exchange until the tenants have left. EVER.

theartfullodger

I've bought thuswise. Straightforward process a competent solicitor should know about. But not all are competent: not issuing correct notices is a criminal offence.

Tenant does not have to leave at end date.

More important find out from tenant when they 1st moved in: it might not be an AST tenancy but Rent Act , impossible to evict & worth much less. Don't believe agent or vendor's solicitor.

MobileSaver

Cuilean wrote: »

There's only one issue - it's currently let until June 2015.

Obviously we couldn't take possession until June.

You can't take possession (i.e. move in) until the tenants have moved out and, regardless of any contract they may have, that could be many months later than June if they are not willing to leave voluntarily.

silvercar

Exchange with delayed completion. Then it is seller's responsibility to get tenants out at end of their contract. Also has advantage in current market of buying next year at today's prices.

dimbo61

The mortgage company will not allow you to buy a property with tenants in unless it is a BTL mortgage.
Please be very careful over this purchase

Annisele

I do wonder why the vendor is putting the property on the market now - sounds to me like he'd much rather sell to an investor with a BTL mortgage (or cash).

If you're buying with a residential mortgage, don't exchange until the tenants are out. If you exchange now for completion in June 2015, your mortgage offer will almost certainly expire in the meantime. That might leave you legally obliged to buy, but without the funds to pay for the house.

If you sell your house and move into rented before exchanging on this house, then you run a (IMO large) risk of losing the new one. If the vendor can find somebody who'll pay earlier, that's what he'll do. And if house prices move much in the meantime, you'll be out of the market having paid the expense of an extra house move.

Frankly, I'd be very surprised if this one was "the house". Keep looking, and if you haven't found anything better by June 2015 go see if this one is still available.