Buying a house without vacant possession, Would you?

flambo33

We're currently buying a house that is occupied by tenants, we're about a day away from exchanging contracts. The terms of the contract are that the seller will evict the tenants before we complete but not before we exchange contracts as he doesn't want to lose money on rent. There's a 3 month clause on the contract to that says if the tenants have not been evicted within 3 months we can back out of the deal.

So we wont be buying the property until it is vacant however there's going to be a 3 month period between exchange and potential completion where we are obliged to buy the house. For this we need a special type of insurance to cover the property encase the tenants burn it down between exchange and completion & we would still be liable to buy it.


would any of you go into this deal or are we bonkers? the house is what we're after and the price is right.

marksoton

Personally, no chance.

AdrianC

Are you buying it to live in, or as a rental?
If you're buying it to live in, how flexible is your current accommodation?

flambo33

we're currently council tenants so our housing is flexible & we're buying to live in, Hence the eviction of current tenants.

Although on this post and another there's some opposition & i must be missing the reason for it? The house will be vacant when we complete, we're protected in the contract against being stuck with tenants and losing our deposit if we backed out?

The only issue for me is the fact we have to insure it between exchange and completion, which after reading on the net is common anyway regardless of the time frame.

Example being if you exchanged for a house on a Monday to complete on Friday but Wednesday the house burnt down, you'd be obliged to buy it. Who wouldn't get insurance to cover against that?

Mojisola

What has your solicitor said about this idea?

mrginge

So if the deal falls through in three months, will the vendor be paying you for all the expense you've already gone to?

flambo33

No, But he won't be paying the £1000 we've already spent if the deal fell through today (a day or 2 before we're due to exchange) the only real extra loss would be time and interest on the deposit.


This is a reply after i raised a concern with my solicitor about what we're doing

[FONT=Times New Roman,serif][FONT=Calibri,sans-serif]The Seller has agreed to sell the property with vacant possession which means it will be in a state for you to physically and legally occupy it.[/FONT][/FONT]

[FONT=Times New Roman,serif][FONT=Calibri,sans-serif]Normally, notice will be served on the tenant before we exchange but in this case the buyer doesn’t want to do this in case you withdraw and he loses the tenant. Instead, we are exchanging on the basis that the seller will serve notice within 7 days and completion will take place within 14 days of the tenant moving out. If he doesn’t move out within three months’, you or the seller can withdraw and you get your deposit back. [/FONT][/FONT]

[FONT=Times New Roman,serif][FONT=Calibri,sans-serif]You would be bonkers to proceed on the basis of vacant possession knowing about the tenant without this clause in the contract but the contract means you aren’t going to lose anything if he doesn’t vacate (other than three months waiting for him to vacate), and don’t forget the people on this forum probably aren’t aware of this clause or are legally trained – just because it’s not common place doesn’t mean its incorrect. [/FONT][/FONT]

[FONT=Times New Roman,serif][FONT=Calibri,sans-serif]As you are struggling to find a reputable insurer why don’t we ask them to amend the contract so the seller insures until completion and then add in something to say if the property is damaged between exchange of contracts and completion you may treat the contract as terminated with no further obligations or add in an obligation on the seller to reinstate the property prior to completion. What do you think?[/FONT][/FONT]

Lioness_Twinkletoes

If the tenant refuses to leave the seller will have to take them to court. Then, once they have a possession order they'll have to go back to court to get a Bailiff's warrant, assuming the tenants haven't gone of their own volition. Given that some LA advice to private renters is to wait until the bailiffs attend or be considered intentionally homeless there is absolutely no guarantee that the tenants will willingly leave.

In my LA evictions are taking around seven months due to a backlog. So you could potentially be waiting a lot, lot longer than three months.

I wouldn't exchange on this basis.

lush_walrus

Yes, if I were in a positon to wait and see what happens within the next three months. If I were desperate to buy or having to give notice myself then no.

Prices are falling off a bit at the moment in most parts of the U.K, due to the big rush pre April inflating prices in a part of the year generally quiet so if it did fall through you may find an equal or better deal. If your area is a rising market maybe consider that too. Ultimately if they do not go you can drop out without penalty. You have already paid the fees for survey so minimum risk monetarily it's just time lost and worry.

HouseBuyer77

You might ask the contract includes a payment to you for costs should completion not occur (add up what you've spent on purchase and round it out e.g. £1000). That should give some extra incentive to the LL to actually get the eviction sorted (as is sounds like if he fails to get them out he pretty much walks away with no penalty other than having to try to sell his property again).

AnnieO1234

Does the contract offer any assurances with regards to what happens if the tenant's take the they're being evicted and trash the place? Who will rectify it if they smash all the sanitary ware, rip out all the copper and flood the place where they've ripped the boiler from the wall?

It sounds as though your seller is wanting to have his cake and eat it. While on the face of it, even with your solicitor's assurances, it seems like you're the ones who are taking all the risks etc. I wouldn't proceed without it being absolutely clear that any damage caused by the continued occupancy of the tenants will be rectified prior to completion by the seller. I would also want to ensure that if the seller decided that they didn't want to replace anything, that they would then incur the costs you've incurred so far.

What does your mortgage company say about this? xxx