Would you complete and pay rent to your buyer whilst waiting for complete on new house?

molerat

From your point of view there are very few negatives, from his ........ you could still be there this time next year having paid no rent !

SDLT_Geek

greatcrested said:

As your buyer is a BTL investor I disagree with the comments above. He will be getting a BTL mortgage.

Providing he is willing to take you on as tenants it seems to solve the problem all round.

However

* forget 'gentleman's agreement' - make sure you have a tenancy agreement

* ensure that the TA clearly states terms eg rent, utilities etc

* ensure that fixtures and fittings and furnishings are clearly designated as yours, (unless you are selling them to him as part of his purchase)

* your tenancy needs to be flexible (ie NOT a 12 month fixed term!) so that you can leave when ready. I would suggest a Monthly Contractual Periodic Tenancy, so no fixed term at all.

* the CPT should specify what notice is required to end it. I suggest 1 contractual period by the tenant (ie a month ending with a period, so depending when notice is served it could be up to 7 weeks) Or you could even request the TA says 2 calender weeks - if so, ensure the TA also states rent due is pro rata (so that if you've just paid a month in advance and then serve 2 weeks notice, you get 2 weeks refunded.)

So the buyer is regulated by the FCA to enter sale and rent back arrangements?  See https://www.handbook.fca.org.uk/handbook/PERG/1/?view=chapter at section 14.5.

AnotherJoe

molerat said:

From your point of view there are very few negatives, from his ........ you could still be there this time next year having paid no rent !

Except he knows the OP has exchanged on another property so will be on the hook to pay the mortgage on that, and since he's going to let it anyway he's no worse off than with any other prospective tenant. 

xylophone

Your buyer has a BTL mortgage. It will work as below?

You complete with him and exchange with your vendor. He gives you a flexible tenancy agreement.
You continue existing arrangements re utilities etc. You pay him rent.
He takes out landlord insurance for the fabric.  You insure your belongings as tenants.
You move to your new home when your vendor moves to his.

davidmcn

xylophone said:

You complete with him and exchange with your vendor. He gives you a flexible tenancy agreement.

Can you clarify what you mean by a "flexible tenancy"? Presumably not one of these.

greatcrested

I'm guessing flxible tenancy in lay terms rather than legalistic.

ie a tenancy with flexibility (periodic) rather than a fixed term.

Might be wrong though.

However SDLT_Geek raises a good point above. It's a complex area (eg is a one-off 'in the course of a business'?) and without analysing the Act and guidance in detail I'm not sure if it applies or not here.

xylophone

Can you clarify what you mean by a "flexible tenancy"?

As suggested by greatcrested in his post above.

* your tenancy needs to be flexible (ie NOT a 12 month fixed term!) so that you can leave when ready. I would suggest a Monthly Contractual Periodic Tenancy, so no fixed term at all.

zonifer

Thanks everyone for the feedback. Looks like it would be a suitable arrangement for us possibly then. Rent wise (paying the buyer to live in our current house after completion) he has asked for the Monthly rent we pay him which works or cover his mortgage  and currently £250 more than what we pay monthly for our mortgage. Would you haggle? Anything else I should know?