Staying in property after completion

Underhoove

Hi all

This is my first forum post and it's quite urgent!

I'm selling my property and the buyer's (who are buying to let I believe) mortgage offer is due to expire on 28th Feb (yes next week!) and the lenders are refusing to extend it.

We both want to exchange and complete on the sale but my issue is that I need to sort out a rental property and was hoping to exchange first, then sort out the rental move before completion two weeks later.

However, due to the time constraints, the buyers were wanting to exchange and complete on the same day (28th). We've said we are unable to meet this as we have no one we can temporarily move in with locally so the kids can still get to school.

The buyers have suggested that if we exchange and complete at the end of the month, they would allow us to remain in the property (paying suitable rent of course) for a couple of weeks after completion so we can sort out a place to rent.

I'm cautiously agreeable to this but wondered about the legal/safety aspects of it. My internet searching has only really shown that it's a bad idea from a buyer's point of view when the seller asks for it not the other way round.

Can anyone give me any advice on whether I should be OK or not? I'm not too bothered about their situation, I just want to make sure my family and I are covered. Both parties want to sell and, short of them reapplying for the mortgage, this seems to be the only option at the moment.

Thanks for any help you can give!

Andy

PasturesNew

If they do that then you, as the previous/occupying owner, have "special enhanced rights to live there" beyond the norm... you could, say, refuse to move for (I think) 5 years and there's nothing they can do about it.

Because of this risk, their solicitor/lender might block it.

Technically, you could probably still do it if it were "under license" or some special agreement setting out your short stay .... but, legally, the law was changed to prevent owners selling to stay/rent and then being turfed out after 6 months by the new LL so they could profit from "a cheap purchase" they made when the owners were desperate.

So you need to check/investigate that. That is your biggest legal block.

p00hsticks

It's highly unlikely that their lender would approve of it - it's usually a condition of a mortage that the property being bought comes with vacant posession at time of competion.

Underhoove

Thanks for the quick response. I have no intention of staying longer than a couple of weeks so have no worry that the 'LL' would turf us out!

We just don't want the house sale to fall through because of an intractable lender on the buyer's side. We're selling for the asking price so I have no worries about being taken advantage of.

davidmcn

As above, it's unlikely to happen once the buyers think about it further, so I doubt it's a solution.

Underhoove

Fair enough. I did wonder about vacant possession being an issue but I wanted to check before saying we would consider their suggestion whether it would put us in a bad situation or not.

If the vacant possession thing stops it, then fair enough, I won't need to worry about it any further. To be honest, all of the delays that have led to this point have been down to the buyers not getting the shizzle together in time. We were ready to exchange last October!

Comms69

Underhoove wrote: »

Thanks for the quick response. I have no intention of staying longer than a couple of weeks so have no worry that the 'LL' would turf us out!

We just don't want the house sale to fall through because of an intractable lender on the buyer's side. We're selling for the asking price so I have no worries about being taken advantage of.

Indeed, but your buyer doesn't know that and things change.


the point is the LL CANNOT turf you out.

ThePants999

I have some experience of this.

In short, you stand no chance of making it all "official", i.e. having a contract that explicitly allows for this. The solicitors won't like it, the lender won't allow it, yadda yadda.

The only chance you have is doing this under the radar as an informal agreement with the buyer. The problem is, you're then signing a contract that says you'll provide vacant possession, then failing to do so, which would technically mean the buyer could sue for damages. So it winds up coming down to how much you trust your buyer.

We did exactly that - signed a normal "vacant possession" contract, but then actually stayed in the house for a month after completion with the buyer's consent. It all turned out absolutely fine. Your mileage may vary - and it may vary a LOT!

victoriavictorious

Not an ideal suggestion, but if there's no other way and if the buyers / their solicitors will not allow you to rent the property after completion, would you be able to bite the bullet and maybe offer to pay (eg by way of a price reduction) for the buyers' mortgage re-application costs, should their current offer expire before you have found a rental property to move to?
I realise it's a bummer and that you are not the one to blame for this situation, but it's still an option which might buy you some extra time (especially if the alternative was that the transaction fell through and you then had to remarket?)

AdrianC

As the others say - this is unwise on the buyer's part and their lender is unlikely to allow it. I'd go a bit further, and point out that is very likely to fall foul of the FCA restrictions on "sale and rent back", making it actively illegal for them to do so, especially given they're buying to let.

The simple answer is to say that you are happy to exchange, but will not complete until later. If they're a viable BtL buyer, they'll not have an issue with a new lender, and are unlikely to walk and lose their costs to date.

Underhoove

Thanks for detailing your first hand experience, very useful.
Glad it all worked out for you in the end. I'm sure if I were to do the same, it would all work out alright.

Having said that, I'm quite a cautious person in these things and I would probably refuse if they wanted to do it 'under the counter' like that.

While I don't want the sale to fall through either and would really like to move, the buyers made their bed by bumbling about for 4 months and then trying to cram it all in at the last minute, so they can lie in it and reapply for the mortgage or go jump and we'll sell it to someone else.

Not sure how many metaphors I mixed up there but you get the idea!