Purchasing a house with a tenant in an Annexe

rapidtornado

Looking for some advice. We are currently in the process of trying to purchase a property that has a separate Annexe in the grounds which is currently let to a tenant. Our Solicitor is insistent that we have to have vacant possession of the property before we can complete. The Estate Agent is advising that we could perform a tenancy transfer on the day of completion and they have seen this many times and thus tenant can remain. Our mortgage company have no issue with the let as it will not be our primary residence and our mortgage approval is purely based on my income regardless of the let so no buy-to-let arrangement is required or wanted.

So my query is can I purchase the house and transfer the tenancy on completion (as this would be the quickest and preferred option) or is there any legal reason why we couldn't do this.... Caught between multiple views and need to know what I CAN do versus what is being ADVISED to do

Thanks...

G_M

OK - ignoring the mortgage issue since you say the lender both knows of the situation and is happy to lend (I'm surprised, but if that's their position.....):

* there is no need to 'transfer the tenancy' - it happens automatically. When you become the owner of the tenanted property, you comply with S3 of the Landlord & Tenant Act 1985 and bingo - the existing tenancy continues uninterrupted but with a new landlord.

Make sure your insurer is as happy as your mortgage lender.

Read:

* New landlords: advice, information & links

However you would be wise to check:

* the tenancy. AST? Start date? Fixed Term?
* the tenant. reliable? Acceptable?
* the accounts. Rent arrears? Paid regularly?
* the deposit. Amount? Registered where and when? Transferred to you?
* the inventory. signed by tenant at start of tenancy?
* the property. Condition? as compared to inventory?

marksoton

The solicitor works for you..

The EA works for the vendor...( And his own cut)

I know who's advice i'd take...

eddddy

rapidtornado wrote: »

...
Our Solicitor is insistent that we have to have vacant possession of the property before we can complete.
...

So I guess you need to ask the solicitor why.

(Are you sure it's not a requirement from your mortgage lender?)

G_M

marksoton wrote: »

The solicitor works for you..

The EA works for the vendor...( And his own cut)

I know who's advice i'd take...

Absolutley agree.

EA just wants the deal to go through smoothly so his client (the seller) pays him. What happens after that will be your problem, not his.

davidmcn

rapidtornado wrote: »

Our mortgage company have no issue with the let

Says who? Even if you have spoken directly to the lender, I've found that you often end up talking to someone who doesn't really understand the process, or what they've asked the solicitor to do.

G_M

davidmcn wrote: »

Says who? Even if you have spoken directly to the lender, I've found that you often end up talking to someone who doesn't really understand the process, or what they've asked the solicitor to do.

Yes. In this scenario, it may well be that a customer adviser on the phone 'assumed' this was a lodger, rathr than a tenant.

But provided the OP has it confirmed in writing by the lender.........

Owain_Moneysaver

rapidtornado wrote: »

Looking for some advice. We are currently in the process of trying to purchase a property that has a separate Annexe in the grounds which is currently let to a tenant. ... our mortgage approval is purely based on my income regardless of the let so no buy-to-let arrangement is required or wanted.

On the contrary, as the Tenants have exclusive possession of part of the property then buy-to-let consent WILL be required, as a matter of law.

You will also need to ensure that the Annexe has planning permission for use as a separate dwelling, as well as complying with all the legal and financial obligations of being a landlord (such as registering with HMRC) immediately.

Unless it is your intention to become a landlord, ignore the estate agent and listen to your solicitor.

agrinnall

While I would normally agree that vacant possession is what would be required, in this case I don't think it's so clear cut. The usual reason is because the tenant occupies the entire property that the buyer wants to move into, but that isn't the situation here. If the OP is happy to be a LL and the mortgage situation is clarified there will be nothing to prevent him moving into the property while the tenant remains in the annexe.

System

Are the council aware and billing the annex separately for council tax?
Is it a separate address as far as Royal Mail are concerned?

So many little things that could cause big problems down the line that need to be sorted now.