Buying House with Tenants

Cakeguts

You still don't know what sort of tenancy agreement the tenants have.

There is also something else which you haven't thought about and that is this. If the property is cheap for the location that it is in which is why you say you can afford it then there is something wrong with it. The fact that they have accepted a lower offer from you means that there is something more wrong with it than the fact that there are tenants living there.

As a guess I would say that what is causing all the problems is that the landlord won't give the tenants notice to move until you have completed all your surveys and all your legal work because if the landlord had wanted to sell this property to someone as a house to live in he would have got rid of the tenants before he put it on the market.

As has already been pointed out the landlord wants to keep the tenants there as long as possible so that he can get his rent money. This means that he won't want to have the house vacant if he can avoid it. So if while you are waiting for the tenants to be evicted from the property someone offers to buy it with the tenants still living there the owner will go with that sale because it will save him a lot of money.

You are extremely unlikely to ever get to completion on this property. The chances are that you will wait and wait and wait for the tenants to leave and while you are waiting someone will make an offer to buy it with the tenants still there. Once the tenants have left this property the landlord has a house that he can sell much more easily so why should he sell it to you cheaply when he can get more money? You have to remember that he doesn't stick by what he says. He has probably told the tenants that they can stay because he is going to sell to another landlord and then he accepts an offer from you. He has told you that he has accepted your offer but accepting an offer isn't legally binding on either of you. He doesn't have to sell the house to you he can change his mind at any time. He could even have accepted the offer from you to give him leverage to get a higher offer from someone else. The problem is that you are a first time buyer and the owner knows that you don't know anything about buying property.

What you have to consider is that you might wait for several months for the tenants to vacate the property and then not get to buy the house because the owner has changed his mind and has put the house back on the market at the same price as all the other houses in this area that you can't afford.

While you are waiting to try to buy this house you are missing out on a lot of others that you would get to buy where people won't change their minds and where there isn't the added complication of evicting tenants.

The buyers who have been put off by the situation have been put off because they know that the chances are that they will spend a lot of money for nothing. They have realised this but because you don't know anything about the process of buying a house you can't see how big the problems you face are.

This business about delaying the exchange of contracts. You have no choice you cannot exchange contracts until the house is vacant.

Basically no one knows how long it will take for the tenants to leave. That will depend on how happy they are to be kicked out of their home.

Read very carefully what GM has written.

People are trying to help you realise that your chances of ever owning this property are very slim and they are very slim because of what can go wrong. You don't have enough experience of buying property or property law to realise what can go wrong so you don't realise that the likely outcome of this is that you will waste a lot of time and money on a property that you will never get to own. You would be better to spend that time and money on a realistic chance of buying a house rather than this one.

Did you know this? Estate agent puts house on market. Viewer puts in an offer. Offer is turned down but next offer has to be higher than the first one to even be considered. The estate agent who is working for the seller not the buyer can lever up the offers based on what has been offered so far. What this means for you is that if anyone else decides to offer on the property you have put an offer on they will be expected to offer more than you or offer a quicker sale than you. In the time that it takes the tenants to leave there could be lots of offers and yours will used as the basis to try to get the others to be higher.

illusionek

I am following this thread with interest as I am also FTB buying tenanted property where I want to live in. Initially I was told that the landlord will be moving current tenants to another property as apparently they are really good tenants and he would like to keep them. My solicitor got a copy of Notice to Quite that was served few days after accepting the offer, so all looked like happy days. Unfortunately no one advised me (solicitor or broker), and I did not think about it since I am just FTB with no experience, not to spend any money. I went ahead and did valuation survey and structural survey on the property whilst tenants were still there. Water under the bridge at this point.

After two months tenants were still in the property and the vendor could not commit to vacant possession date as apparently they had some delays with the other house tenants meant to move in. I said I will not exchange until vacant possession and vendor committed to date in 6 weeks time. However now I got a copy of email from tenants to vendor confirming they will move out in 2 weeks time and reading this email it looks like they are not staying with the vendor in his other property.

So my question is what can I do to ensure I have no issue with tenants moving back? I already said I want to inspect property before exchange to confirm vacant possession but really anything can happen before exchange and completion. If worse case scenario happen and I open the door on the day of completion and tenants are there is it going to be my problem or the vendors since they were selling with vacant possession? Is there anything else I could to to minimize likelihood of this situation or reduce impact on me?

I cant get anything out of my solicitor so far apart from the fact we will not be exchanging before vacant possession is gained.

AnotherJoe

You cant do anything to 100% ensure that, but thats no different to buying a house and then the sellers refusing to move.

If you visit beforehand and its empty that would give you about as much assurance as you could expect, you could always pay for new locks to be fitted if the vendor is agreeable, so at least you'd be assured the previous tenants didn't have a key.

As to what happens if "I open the door on the day of completion and tenants are there is it going to be my problem or the vendors since they were selling with vacant possession?" thats an interesting question, it could be argued its not the vendor problem since they got them out and thus they are now squatting and its not vendors responsibility , but OTOH as you say they have promised vacant possession. Could be a big legal mess.

So its in both your interests that the keys are changed so point this out to vendor if they are reluctant.

Mojisola

Cakeguts wrote: »

If the property is cheap for the location that it is in which is why you say you can afford it then there is something wrong with it.

The fact that they have accepted a lower offer from you means that there is something more wrong with it than the fact that there are tenants living there.

This would worry me, too.

If the property has good tenants and is up for sale cheaper than everything in the area, why hasn't an investor snapped it up?

If the savvy, experienced landlords haven't wanted to buy it, there's likely to be problems that you haven't realised.

davidmcn

Geek1337 wrote: »

I hadn't considered that the lender may be hesitant to lend to us with the property currently having tenants.

Your lender won't care who is currently in the property, only that it is vacant by the time of completion of your purchase.

AnotherJoe

davidmcn wrote: »

Your lender won't care who is currently in the property, only that it is vacant by the time of completion of your purchase.

From what I've read, if its tenanted, they will want it vacant at exchange?

Cakeguts

illusionek wrote: »

I am following this thread with interest as I am also FTB buying tenanted property where I want to live in. Initially I was told that the landlord will be moving current tenants to another property as apparently they are really good tenants and he would like to keep them. My solicitor got a copy of Notice to Quite that was served few days after accepting the offer, so all looked like happy days. Unfortunately no one advised me (solicitor or broker), and I did not think about it since I am just FTB with no experience, not to spend any money. I went ahead and did valuation survey and structural survey on the property whilst tenants were still there. Water under the bridge at this point.

After two months tenants were still in the property and the vendor could not commit to vacant possession date as apparently they had some delays with the other house tenants meant to move in. I said I will not exchange until vacant possession and vendor committed to date in 6 weeks time. However now I got a copy of email from tenants to vendor confirming they will move out in 2 weeks time and reading this email it looks like they are not staying with the vendor in his other property.

So my question is what can I do to ensure I have no issue with tenants moving back? I already said I want to inspect property before exchange to confirm vacant possession but really anything can happen before exchange and completion. If worse case scenario happen and I open the door on the day of completion and tenants are there is it going to be my problem or the vendors since they were selling with vacant possession? Is there anything else I could to to minimize likelihood of this situation or reduce impact on me?

I cant get anything out of my solicitor so far apart from the fact we will not be exchanging before vacant possession is gained.

You also need to inspect the property before exchange to check that it is still in the condition that it was when you first viewed it. Landlords have a checking out system where they check for damage left by tenants at properties. Tenants have to pay deposits but if the tenants wreck the house the deposit won't cover all of the amount of damage. You may find yourself looking at a house that needs all new floor coverings, a new kitchen and a new bathroom. If the landlord does the repairs they will put in the cheapest fittings that they can find because they are selling the house and you will not be buying what you first viewed.

Newlifer17

I have been viewing houses and a few had sitting tenants and after a bit of research decided not to go ahead with any of them because I just find the whole buying a house stressful enough as it is without the potential hassle of a tenant causing problems. Ive now offered on a house that is empty but was tenanted but they were given notice before it was put on the market, The house is still a bit of a mess but at least I know what I need to do to it before I move in. Problem solved.
Unless you are really wanting this house then move on and find one empty or not tenanted!

davidmcn

AnotherJoe wrote: »

From what I've read, if its tenanted, they will want it vacant at exchange?

The lender is only interested in what the position is at completion. They have no involvement or risk at exchange and are not a party to the contract.

macman

Geek1337 wrote: »

I hadn't considered that the lender may be hesitant to lend to us with the property currently having tenants. I will follow this up.

Having met the tenants, I really don't think it's likely they'd cause damage but people are unpredictable.

It's not about them being 'hesitant'. You are applying for a residential mortgage, so if the property is still tenanted after exchange, then you would be in breach of the mortgage terms, because you do not have a buy to let mortgage.