Buying a flat to live in - currently with tenants in-situ

LdnFtB

Hi,

I'm looking at potentially purchasing a flat to live in from a landlord. The property is currently tenanted, although the estate agent assures me that the flat is being offered with 'full vacant possession' - i.e. the tenancies will be terminated as part of the conveyancing process.

The obvious risk to me is that either the tenants squat after the tenancy is ended, or the landlord wrongly serves the section 21 notice and they can continue in the property. My initial thoughts are to delay exchange until after the flat is vacated, but then ensure a fairly quick turnaround between exchange and completion (i.e. one week or a fortnight).

The other risk that's occurred to me is that given that this is the tenants home, they are fully within their rights to refuse access for viewings and surveys and I respect that. This could further delay the transaction process.

What are the other potential pitfalls I should watch out for, and how to structure the transaction to ensure that the risk is minimised?

xylophone

https://forums.moneysavingexpert.com/discussion/5671594

You haven't yet viewed the property?

Ask for a viewing to get a sense of the tenants' attitude?

ST1991

Don't exchange until the tenants have vacated and the property is vacant.
Check that they have definitely left and that the property is left in a suitable condition with another visit with the EA before exchanging.

LdnFtB

Thank-you, it's interesting to see it from the other perspective.

We've had one viewing, have a second lined up tomorrow night to measure up for alterations/refurbishment.

The tenants seemed quite sullen on the first viewing and I absolutely cannot blame them for it. Being chucked out because your landlord wants to cash in would make me resentful too.

The format of the property also makes me a little dubious about the vendor - the living room has been turned into another bedroom in order to cram in as many tenants as possible.

Still, it has good bones and a great location so willing to proceed - just want to know what to keep my eyes peeled for.

DumbMuscle

You have correctly identified the risks. Get a viewing, and see if you can meet the tenants. When I was looking at a house in a similar position, I chatted to the tenants to check they were OK with it - turns out that they were all in favour, as they were in the middle of a fixed term tenancy, and wanted the LL's consent to break it (which he was witholding until a buyer was sorted). In the end, I went for a different house (which was a bit more expensive, but also nicer) - but I'm kind of wishing I had gone for that house, since it looks like the sale completed considerably earlier than mine!

Pixie5740

The tenants cannot be squatters. The tenancy can only be ended by then or a court and until that happens the tenants have a legally binding contract which gives them exclusive occupation of the property. All you have is a gentleman's agreement that you might buy the property and that the landlord might sell it to you. In this little game of top trumps the tenants win.

You have no idea what has been communicated to the tenants or when realistically they might move out so unless you really like this property keep looking.

eddddy

I would look at it like this...

There are more things that could go wrong if you're buying a flat which currently has tenants (mainly related to them not wanting to move out, and/or leaving the property damaged).

This might scare off a lot of prospective buyers - including many MSE contributors, it seems. As a result, the flat might not attract good offers.

So I might be tempted to make a lower offer - but knowing that I might have to wait a long time before the tenants moved out...

... or in extreme circumstances, I might have to drop out.

i.e. I balance the possibility of getting a cheaper flat, against the risk of losing some conveyancing fees (and wasting some time).

Guest101

LdnFtB wrote: »

Hi,

I'm looking at potentially purchasing a flat to live in from a landlord. The property is currently tenanted, although the estate agent assures me that the flat is being offered with 'full vacant possession' - i.e. the tenancies will be terminated as part of the conveyancing process.

The obvious risk to me is that either the tenants squat after the tenancy is ended, or the landlord wrongly serves the section 21 notice and they can continue in the property. My initial thoughts are to delay exchange until after the flat is vacated, but then ensure a fairly quick turnaround between exchange and completion (i.e. one week or a fortnight).

The other risk that's occurred to me is that given that this is the tenants home, they are fully within their rights to refuse access for viewings and surveys and I respect that. This could further delay the transaction process.

What are the other potential pitfalls I should watch out for, and how to structure the transaction to ensure that the risk is minimised?

Tenants don't squat, they live legally in a property. That's lesson 1.


I wouldn't touch it until the tenants have left.

xylophone

Being chucked out because your landlord wants to cash in would make me resentful too.

As far as the landlord was concerned, he bought an investment property - he wants to realise his investment which is quite reasonable.

Most tenants will need to accept that ultimately their housing situation is not secure.

All that said, a landlord must accept that having his cake and eating it is a "big ask"......

teddysmum

It's a big risk : paying legal and survey fees, only to find that the tenants have refused to move out, so the sale can't be completed. It will be even more difficult if a number of individuals, as opposed to one couple/family , are involved. (Some may be willing ,while others are difficult).


Vacancy cannot be guaranteed until all parties have actually left.

Cakeguts

If tenants don't leave at the end of the notice given by the landlord the landlord has to take them to court to get possession. This can take 6 months. So what you don't want is for the landlord to serve notice just before you get all of the legal work done and when you have spent a lot of money on surveys and searches as getting vacant possession could take 6 months.

So if you want to buy this flat the best thing you can do is to wait until the landlord has got possession of the property before you make an offer.

The tenants won't be squatting after the notice has ended. They have every right to stay there until a court grants possession. This can take 6 months.

The only way to minimise the risk is to either wait until the flat is vacant or to buy a different one.