Tempory Renting to our Buyers

PaulC5

With various issues with paperwork etc we have been left with no option than to temporarily rent our property out to our buyers (Or lose the chain) for a couple of weeks whilst some last minute paperwork gets completed that we have only just been made aware of.

However there solicitor has made it clear that they wont be exchanging contracts until we are ready to complete so technically in my mind they could rent these next couple of weeks and decide they dont want to buy the house, is this something we should be worried about or not?

Also can anybody give me any tips or things I need to do/know about before we write up and sign a rental agreement etc.

Any advice and information will be greatly appreciated.

Thanks

Cornucopia

I did exactly this, although it was over a longer period, as the sale dragged on and on.

I set it up with a normal AST agreement, but with a clause in it that the buyers would be refunded the rent if the sale went through within 12 months of the date, I also set the rent at top market rate.

In the end, the sale dragged on and on, and eventually the buyers got fed up with it, and also having "tried before buying" decided they didn't want the house. They walked away, and I kept £9k of rent. Both parties happy.

Be aware that all the professionals will be against it for various reasons, and also look for clauses requiring vacant possession at the time of legal completion.

theartfullodger

Discussed here..
http://www.landlordzone.co.uk/forums/showthread.php?69715-Temporarily-letting-to-my-buyer

Make sure whoever drafts the tenancy fully understands what he is doing (ie not just a nice divorce-&-house-sale solicitor)

princeofpounds

The biggest problem with this is that once they are in occupation, you will be locked out from marketing it for a long time if they fail to get their act together (minimum 6 months, and if they are trying to be a problem they can string it out for 8 months). Sometimes that leverage can be used to gazunder.


Plus all the normal renting risks/issues, plus the bet you take on house prices in the meantime.


If you are happy with those issues, then you can consider it.

PaulC5

The problem with the sale now falls with us as we found out today that we require some extra paperwork doing which can take up to 6 weeks.

Our buyers, buyer has threatened to pull out if we don't complete this week (They did move out of there home at the beginning of the month as we all thought we were nearly ready to be fair to them.)

Our buyers have just had there first baby and don't want the hassle of moving twice so as a favor I've suggested they move into our house as we also moved out at the beginning of the month and living rent free with the in-laws!
We are already at 10 weeks since we accepted there offer and delays have already been had from there lender not progressing a survey on our house so everybody is already stressed out.

mrginge

Are you allowed to let your property?

theartfullodger

Do you have gas-safe certificate?? Safe electrics?? Landlord insurance??

PaulC5

mrginge wrote: »

Are you allowed to let your property?

Yes as we have already looked down that avenue to buy a cheaper house but didn't end up doing that in the end.

PaulC5

theartfullodger wrote: »

Do you have gas-safe certificate?? Safe electrics?? Landlord insurance??

We have the gas safe installation certificate and the electric safety certificate as the buyers solicitor has already asked for these for the purchase.

I'm told there is a landlords gas safety certificate we require, is there such thing as one and how does it differ to the one I already have?

The property is new build and only 4 years old.

Landlord insurance I will deal with, can't see it being a problem, just another cost which we hope will be covered by the rent fee.

theartfullodger

Gas safe cert is needed every 12 months: Installation certificate is one-off, before the faults appear. You need it -

Nothing to stop you charging the people for all these costs...

(Or get another buyer..)

G_M

1) you need your lender's consent if you have a mortgage
2) you need LL's insurance - yours will be invalid
3) you need a LL's gas safety certificate (every 12 months)
4) if exchange does not happen (for whatever reason) you cannot start eviction process for at least 6 months and it might take a further 3 months
5) during that time the 'tenants' might decline access for other potential buyers etc
6) you need to declare the rent as income to HMRC and pay tax
7) you need to comply with 36 other regulations. Read:

* New landlords: advice, information & links

Your solicitor (or worse, licenced conveyancer) is probably an expert at conveyancing. He may know very litle about landlord/tenant law and not be the best source of advice.