Buying a flat with tenants- contract advice

[Deleted User]

But it isn't the only answer. Plenty of people have exchanged subject to vacant possession, taken that risk, and been fine. I know it is a risk but it is one we are willing to take, I wasn't looking for advice on whether people thought it was a good idea or not.

[Deleted User]

Pixie5740 wrote: »

I didn't have to go dredging up your posting history. You have a distinctive posting style and by distinctive I mean rude. That's how I remembered you had posted before about buying a flat with tenants in it.

I think this is more a classic case of someone posting on a public form and then being rude to people who don't tell them what they want to hear.




You're right it doesn't matter one jot whether you are male or female. Whilst "he" is a masculine pronoun many people use it as a generic pronoun when the gender is not known. So you see it's not interesting at all but rather banal.

You're right, absolutely nothing about your post is rude, it's all me.

mrginge

kinger101 wrote: »

The lender's money is not at risk on exchange of contracts. As long as the solicitor informs the purchaser that the mortgage won't be available without the vacant possession, I don't think they've done anything wrong if they do exchange at their client's insistence.

6.5.1 Unless otherwise stated in your instructions, it is a term of the loan that vacant possession is obtained. The contract must provide for this. If you doubt that vacant possession will be given, you must not part with the advance and should report the position to us

6.5.1 is not time bound. It makes no reference to the doubt only being applicable at point of completion.
The question of risk to lender's money is irrelevant. The clause clearly states that if there is doubt, the lender should be informed. In this case there is doubt.

It does not say that exchange cannot take place and at no point do I suggest that it does say that.
I asked what the lender said, because
A. There is doubt.
B. 6.5.1 states the lender should be informed.

if you and davidmcn wish to make a generalised assumption that the lender will not care then that's great, but that assumption does not mean that they don't have to be informed.

franklee

[Deleted User] wrote:

Also I am a 'she' not a 'he'- not that it matters, but interesting that's your default assumption.

We can hardy litter all posts with he/she (I find documents that do that practically unreadable) so putting just the he is a reasonable catch all when the gender is unknown. Still being as you are sensitive I've tried to accommodate in my post.

Of course you can ask to amend the standard contract terms but if the vendor has been unwilling to make any compromises thus far why should he/she start now? Best thing to do is explain the whole situation to your solicitor - he/she should know how to deal with it and the mortgage lender.

Have you asked to see a copy of the tenancy agreement, prescribed information with proof of service etc. so as to make sure there's nothing to invalidate a section 21 notice. Also when notice is served ask for a copy of that too and check it's all valid.

What are your plans if your mortgage offer runs out while you wait for the tenants to leave?

You do realise that once contacts are exchanged the tenants will have the landlord/landlady over a barrel? Franky I'm surprised he/she would take that risk - and the risk is mainly on him/her rather than you. I hope he/she is not planning an illegal eviction.

[Deleted User]

I can affirm, having been through the eviction process as a tenant that if the tenant has no where to go to (hopefully they do), it took three months from the Section 21 date, and £390 in total in court costs. And I didn't fight it or ask for any extensions, which you can. The council insisted I be officially evicted through the courts. There was nothing I could do.

anselld

[Deleted User] wrote:

But it isn't the only answer. Plenty of people have exchanged subject to vacant possession, taken that risk, and been fine. I know it is a risk but it is one we are willing to take, I wasn't looking for advice on whether people thought it was a good idea or not.

It is normal to exchange subject to vacant possession where the vendor is an owner occupier and it is under their control to deliver vacant possession. The reason solicitors advise strongly against entering a vacant possession contract when the property is tenanted is that it by no means under the control of the vendor to deliver.

I hope your plan is successful, but I predict that one or other solicitors (probably the vendors') will put a stop to it prior to exchange. And the more you try to write your own protection in the contract, the more you will encourage them to do so!

kinger101

mrginge wrote: »

6.5.1 is not time bound. It makes no reference to the doubt only being applicable at point of completion.
The question of risk to lender's money is irrelevant. The clause clearly states that if there is doubt, the lender should be informed. In this case there is doubt.

It does not say that exchange cannot take place and at no point do I suggest that it does say that.
I asked what the lender said, because
A. There is doubt.
B. 6.5.1 states the lender should be informed.

if you and davidmcn wish to make a generalised assumption that the lender will not care then that's great, but that assumption does not mean that they don't have to be informed.

I'm going by a literal interpretation of what 6.5.1 says. It says they must not advance the mortgage if they suspect there won't be vacant possession. It doesn't say contracts cannot be exchanged.

The reality is that if the vendor decided to go ahead and there was not vacant possession, the solicitor would be able to tell their client they won't complete, and they'd already explained the risks.

Solicitors are there to advise and execute. They can either do as they're told, or refuse to act. They can't dictate.

What's more likely to happen is the OP will see sense and not exchange before vacant possession, or get their solicitor to insert a clause making it conditional exchange. The conditional exchange isn't a good idea though IMO.

AdrianC

kinger101 wrote: »

It says they must not advance the mortgage if they suspect there won't be vacant possession. It doesn't say contracts cannot be exchanged.

If the lender agrees to exchange going ahead, in the knowledge that they might not advance the funds to allow the buyer to complete, is that not leaving them liable for breach of contract, though?

kinger101

AdrianC wrote: »

If the lender agrees to exchange going ahead, in the knowledge that they might not advance the funds to allow the buyer to complete, is that not leaving them liable for breach of contract, though?

The mortgage offer would stipulate vacant possession, so no. The lender doesn't agree to, or decline the exchange of the contract, as they are not a party on the contract that is being exchanged.

There are a number of other circumstances where they could withdraw their offer between exchange and completion. Bankruptcy search. Credit check. Change in circumstances (loss of job). I think their small print allows them to pull with plug whenever they want to.