Selling house to BTL investors & renting it for short period

williamsp

I've recently sold my house to a couple who are BTL investors. One of the conditions of sale was that because I was buying a new build home which will not be ready until the Winter, that I would continue to stay in my house but as a tenant until my new home was ready (as we need to exchange by mid-July).
I was told by the Developer and the E.A. that it is a feasible option to rent on an month by month basis, as long as the buyers are happy with this which they stated they were. This saves me having to move out and find something to rent for a period of 3-5 months.

My question is though, how do we setup the tenancy agreement ?
I've done some research and it is possible to setup a periodic tenancy from the start but should this be drawn up by the solicitors involved in the conveyancing or is this completely separate & should be drawn up between myself and the BTL investors? They are first time investors so I'm not sure they understand fully the month by month basis and will involve lettings agents who may set them down the path of minimum 6month AST which is no good for me, although I've read you can have a break clause included.

Anyone any experience or knowledge of how all this should work ?
Thanks in advance.

anselld

Has either party asked their solicitor if this is feasible?
The rental agreement itself is not the issue but the fact that it is linked to the sale/purchase will cause major wobbles with most solicitors.

Annisele

That sounds like a "sale-and-rent-back" arrangement, which is highly regulated. Definitely worth letting the solicitors know what's going on - if the buyer has a mortgage, their lender is very unlikely to be happy with this.

AdrianC

Agreed on the SARB wobbliness.

But, even if there is a 6mo AST, it can be broken at any time with the agreement of both tenant and landlord.

PasturesNew

Two issues, as already noted above:

1] Sell/rent back ... if you sell your house, then rent it back, there's a whole raft of new legislation to protect you from unscrupulous investors ripping you off with low prices then booting you out. The law was changed so you've got special rights for (I think) five years. Longer than most other people would have.

2] An AST can be any length at all - but they can't commence any form of eviction for 6 months' time.

If they have a mortgage, then expect either/both of these problems to rear its head.

AdrianC

PasturesNew wrote: »

2] An AST can be any length at all - but they can't commence any form of eviction for 6 months' time.

...unless two month's rent arrears build up...

silvercar

You may need to officially move out, sign over vacant possession and move back in the next day.

G_M

The points above about sale/rent back are valid. Discuss with conveyancing solicitor.

However so far as the tenancy is concerned the simplest solution is a Contractual Periodic Tenancy - either weekly or monthly.

As Pastures points out, the law prevents a landlord from going to court for possession via a S21 in the first 6 months, but the tenant can end the tenancy in the normal way from day one (one full tenancy period ending with a period).

Since the buyer is a BTL landlord, the only reason (presumably) he'd want to evict would be rent arrears (and he could use a S8 for this).

It would be up to the LL to decide whether to draw up a written tenancy agreement (via his solicitor, landlord association, whatever) or rely on a verbal contract (stupid but legally valid).

williamsp

Thanks for replies.

Perhaps my wording wasn't best put at the beginning, but it's not part of the contract of sale, rather I agreed verbally with the purchasers and then put in writing that I would be allowed to continue as a tenant upon completion.
They were happy with this as they get a guaranteed tenant & they know I will look after the property as it's been my home for almost 14 years.

A periodic tenancy was also the way I thought would be best although I didn't know that an AST could be for any length. I thought the min was for 6 months so was against this as my new home should be ready in 4 months or less so I'll investigate this. However, I have read that even a 6 month AST would be OK as long as a break clause was inserted.

I've already spoken with my solicitor who is going to contact buyers solicitors but as per my original question I'm not sure whether any contract/tenancy agreement is drafted between them or whether it is the buyers solicitors.