Seller wants to complete the sale but stay in the house

ProDave

Be careful. I am sure the tenant has to sign the SAT documents in the correct order and BEFORE he takes possession, otherwise it may not be a valid SAT.

So I think he has to move out (to a hotel) to give vacant possession, sign the tenancy then move (back) in.

You also have to fulfil your obligations as a landlord such as gas safe certificate, smoke alarms etc so you may need time to get the property legally fit for rental.

SDLT_Geek

Buying and then renting back to the seller is likely to be unlawful under the sale and rent back provisions.  See Q38E here in the FAC's handbook https://www.handbook.fca.org.uk/handbook/PERG/14/5.html  

greatcrested

If you are going to grant him a tenancy the day after your purchase ::

1) he must still move out and give you vacant possession, then move back

2) you must (absolutely must) treat this as no different to any other tenant application so

3) do the normal tenant vetting eg credit checks etc

4) take a deposit (and protect it)

5) proper signed inventory with photos

6) all the other legally required tasks: EPC, gas report given to him before he moves in!), Right To Rent check, etc etc

Just because you 'know' him, and he's lived there, does not mean you can or should ignore the legal requirements.

But personally I'd not do this.

Post 7: New landlords (1):advice & information :see links in next post

Post 8: New landlords (2): Essential links for further information

jim_walton

Thanks to SDLT_Geek and ProDave for there replies.  I think I’d beater leaves this in solicitor’s hands.   Thanks again. 

jim_walton

Yes.  I realise I will have landlords responsibility particularly regarding gas and fire safety. I intend to take them seriously.  Thanks. 

GDB2222

SDLT_Geek said:

Buying and then renting back to the seller is likely to be unlawful under the sale and rent back provisions.  See Q38E here in the FAC's handbook https://www.handbook.fca.org.uk/handbook/PERG/14/5.html  

I was going to say exactly the same.  It's definitely a problem. 


Can I ask what the seller is trying to achieve?  Does he need a lump of cash currently for something? Or is he having trouble paying his mortgage? Knowing the end result required, it might be possible to structure something.

zonifer

We are currently in a similarish position. Our buyer is buying our house as a buy to let and our seller is waiting for their new build to be finished so our buyer has said we can stay here and rent from him. We completed yesterday. Our estate agent also advised us of a gentleman's agreement however we wanted to protect ourselves and ensured both the solicitor knew and that we had a proper tenancy agreement drawn up. No problems and hopefully we will only be here a few months. I would say that £100 a week is very cheap! We are basically covering our buyer's mortgage. I asked for advise on here. Some were wary (more so for the risk to the buyer and that the solicitors would not allow it for some reason) but it's been absolutely fine. 

greatcrested

jim_walton said:

Yes.  I realise I will have landlords responsibility particularly regarding gas and fire safety. I intend to take them seriously.  Thanks. 

gas and fire are just 2 of the 98 regulations with which you must comply. I trust you have fully researched and understood the legal responsibilities....

See my earlier post and links.

jim_walton

The seller is buying a new build which won’t be ready till April 2020. He wants to complete as soon as possible because he’s signed up for the new house and must have made some financial commitments. 

He asked me if he could stay until his new house was ready to save him having to move to rented accommodation and then move again to the new build. I naively agreed to this. 

It’s becoming clear that the vendor is asking too much of me.  However I will wait to see what my solicitor says.  

Thanks for the replies 

jim_walton

Thanks Zonifer.   So did your buyer buy with out vacant possession?  If so then Illy go down the same route I think.  Also I suggested £100 a week because he offered to pay half the Stamp Duty.