Buying a flat with tenants- contract advice

[Deleted User]

In the process of purchasing a flat with tenants, which we are intending to live in. Landlord has said he will give them notice (they are on a 2 month notice period, we have seen proof of this) when we exchange. We are on a 2 month notice period with our flat so that's fine. Due to exchange by end of this week.

Got the draft contract yesterday, and the only mention it makes is to say that 'at legal completion the seller will transfer ownership of the property to the buyer with vacant possession.' This is all fine, however that's all it says regarding his end of the bargain, and then goes on to say if we don't complete by the agreed completion date that we he is able to sue us. The only way we wouldn't complete on the agreed date would be if the tenants hadn't left, which wouldn't be our fault.

I will be ringing the solicitor first thing on Monday, but I wondered if anyone with any experience knew what I should be requesting is amended? It seems to me that a specific date for giving them notice and them being out should be specified, but that's almost impossible to know if he's refusing to serve them notice until contracts are exchanged. We'd also like something in there which covers us should we not be able to exchange- ie if we can't complete on the agreed date because tenants are still in, he has to compensate us as we will be homeless.

We have spoken to the tenants ourselves and even though they haven't had notice they know we're moving in so have started looking round for new property themselves, so we don't anticipate any issues- however I'd like something concrete in the contract so that if something goes wrong, we're the ones who are protected.

Any advice welcome (unless it's along the lines of "this is why you don't start proceedings on a purchase until the tenants are gone" as we're here now and as specified above the landlord refused to service notice until exchange). Thanks!

anselld

Most solicitors will advise that tenants are evicted before you exchange.
The risk of the vendor trying to have their cake and eat it are too high.

chris_m

[Deleted User] wrote:

Any advice welcome (unless it's along the lines of "this is why you don't start proceedings on a purchase until the tenants are gone"

Since you already know that, good luck.

[Deleted User]

Thanks for the smug responses. If anyone has advice on the question I actually asked I'd be grateful.

kinger101

A few points.

(a) Serving notice on the tenants does not guarantee they'll leave on the notice date. Only the courts can evict the tenants, and this could take several months if they refuse to leave. If they need to go into council housing, they will be advised to wait for the courts to evict them.

(b) It would be very unwise if you exchanged before the tenants have been evicted. IMO, is not even worth starting searches and surveys until then.

(c) If you failed to complete on the agreed date and it was his fault because you did not have vacant possession, you could sue him. He could not sue you no matter what the contract says. You'd be able to recover all expenses associated with non-completion.

(d) There's also the risk that any mortgage offer will expire in the period to delayed completion.

EDIT - you'll probably get more responses if you don't insult those that do reply.

[Deleted User]

Thanks kinger for the constructive advice.

Ideally we wouldn't have started anything till they were gone, but he refused so one of us had to compromise. We have been property hunting for a year and have lost three other properties so are bending over backwards to try and make this one happen.

We are almost certain that the tenants will leave as agreed, we just want something in there that covers us as we're aware that it's not guaranteed. Point c) is useful to know.

EDIT- I don't believe it's rude to point out what sort of responses I'm not after, especially when I already made it clear in my first post. Helpful comments are welcomed. "I told you so" ones are not.

AdrianC

OK, so you agree to exchange - which involves setting a completion date - and he then serves his two months notice on his tenants.

So you've got a completion date at least two months away.

The notice expires, the tenants are still in place. He can now start eviction proceedings. This can take several months, and you have no way of knowing what state the property will be in when they do eventually vacate it.

So HE cannot complete the contract. He is then liable for your costs arising.

Are you happy for the risk of completion being five months, not two months, after exchange? Are you happy for the risk of moving into a recently trashed-and-quickly-tarted property?

Remember, it's only your directly incurred costs that he's liable for - not any kind of compensation for your inconvenience and blood pressure. You will just be returned to the same financial position as if you'd moved in on the intended completion date - but with three months worth of very grey hair to show for it all.

Or you could do the sensible thing, and tell him not to be so bloody mealy-minded over wringing that last extra month of rent out of his tenants. Ooops. Sorry. Couldn't help myself with that last bit.

mrginge

Will the lender allow your solicitor to exchange without vacant possession?

[Deleted User]

Thank you AdrianC. Yes we of course tried very hard to tell him not to be so measly minded, he refused to budge. He is selling the entire block of ten flats and is not giving notice until exchange on any of them.

We are willing to risk everything you have listed. If he would be liable for directly incurred costs, would that be as the contract currently stands? Or would we need to have something else written in?

In terms of additional costs ie accommodation costs, we are going to ask our solicitors to have something out in the contract where by he pays X amount a month should we not complete and have to find somewhere else to live. We just want to cover ourselves as best we can in this not ideal situation.

mrginge- yes we can exchange, just not complete.

Voyager2002

The advice that you say you don't want is probably the most useful, since you are stepping into a legal minefield. Given where you are, you should make an appointment to see your solicitor face-to-face to discuss your options and the way in which the situation could develop. I don't think that a telephone conversation will be enough.

[Deleted User]

Thanks Voyager. Unfortunately we have already got to this point, so it's all very well advising me not to start surveys or searches but that's already been done! In addition to your other advice, we are in London and our solicitor is in Manchester (very limited recommended panel to choose from with our lender and all were miles away).

My mum works for a landlord so has already fully advised on all the ways this could go wrong and how difficult it can be to get tenants out. It's not that we don't understand the risks, it's that we want to understand how best to proceed despite them.