Vendors, not buyer, want to exchange with tenant in situ

morreau

Hi all,

I have read plenty on here urging the buyer not to exchange before tenants have vacated. I assumed both parties would have wanted to wait until tenants have vacated.

However today I was informed that vendors are keen to exchange before Vacant possession. I am in no chain and relatively easy about move in date and have alternative accomodation if required. I am told the tenants and vendors hae good relationship. I have also met tenants during viewings and have no reason to suspect they would pose a problem

I am inclined to agree to move things forward but have written in contract that condition must be as per survey and fixtures and fittings.

I assume I can walk away if tenants overstay as Vendors will have broken contract. I will have 4 months on mortgage offer by agreed completion.

Is there anything I am missing? The risk seems all with vendor

rugby6ft8

Don't do it. You need vacant possession. Don't exchange until the tenants are out. Our solicitor wouldn't let us exchange until our tenants were physically out of the property.

G_M

You're right that the key financial risk is on the vendor. Assuming the contract states 'vacant possession', then if the tenants fail to leave the vendors will be unable to Complete and will be in breach of the contract. You the buyer can then start hitting them for loads of costs.

The risk to you, as buyer, is that you do not have a property to move into on the date you expected (and perhaps not for some time). For most buyers this would be highly inconvenient, even if the associated costs could be reclaimed.

If you have alternative accomodation and are laid back about move-in date, and can comfortably use that alternative accomodation for some time, then go ahead. Whether you could immediately 'walk away' from the contract I doubt.

Personally I would not agree, but it's your decision.

morreau

Thanks.

I am inclined to not exchange until after but I feel vendor may get antsy. Having said that, if they pulled out they would only face this problem with another buyer another 6 weeks down the line.

mrginge

G_M wrote: »

Personally I would not agree, but it's your decision.

It may also of course be the mortgage lenders decision (through the solicitor who is employed to protect their interest).

eddddy

A couple of extra thoughts...

If you do go down this route, and the tenant doesn't move out... rather than having to quantify your losses, you could ask for a penalty clause in the contract - e.g. the vendor has to pay £1k per week until the tenant moves out. (And after 6 weeks, the contract becomes void and the vendor has to pay you a flat £5k to cover your costs.)

And I would be thinking to myself "If I do the vendor a favour, by minimising their void period - what should I ask for in return?".

franklee

If the tenants cause damage then I'd be up to you to prove it wasn't like that as agreed in the sale and reclaim costs which is a pain for you. Why not suggest just a few days between exchange and completion. That way you can still inspect before exchange and the vendor don't have an empty property for long. You could even exchange and complete on the same day and offer to be flexible when that is so the tenants have some leeway to set their moving date. Why would the vendor object to that?

Old_Git

the tenant may want to stay which may be why it is not being sold with vacant possession .Unless you are prepared to be a landlord dont do it .

Pixie5740

What about the insurance? You'll need to insure the property from exchange but would regular buildings insurance be valid if there are tenants in-situ?

The vendor can get as antsy as they like. Unless they find a buyer who wants to be a landlord they're not going to be able to exchange with tenants still living there. Even then a landlord might not want the current tenants, they might want vacant possession so they can select their own tenants.

morreau

I would make sure the vendor pays for insurance up to completion.

I am going to dig my heels in.

Thanks

Pixie5740

Why do you have to appease the vendor? By this stage the vendor should have issued notice to the tenants and be in process of regaining possession of the property. It's the vendor who is holding things up, not you.