Buying a property with tenants in-situ

sharp910sh

Thank you for the advice think I will cancel the viewing. 

sharp910sh

Foolishly decided to see the property. Thought maybe it's worth seeing it, but the estate agent put me off even more telling me "the tenants are happy to stay, if you want to buy the property as an investment". He also said there will leave within 3 months as they are nice to the landlord. Right. 

He confirmed that he will not give them 3 months notice (when it should be 6 months) until he has accepted an offer. He literally wants his cake and eat it. Wonder why he thinks he can break the law and only give them 3 months rather than 6 and think they will leave without an issue. 

eddddy

Just for balance - all the LLs I know that have needed their tenants to leave have always reached amicable agreements with the tenants, and the tenants have always left by the date agreed.  Similarly with all the tenants I know - they've always left on a date amicably agreed with their LL.

Except perhaps in one case, where the tenant wanted to be rehoused by the council, so both LL and tenant agreed that they'd have to go through the charade of a formal eviction.

But in one particular case where the LL was selling, it was planned that the tenant would leave on a Thursday, exchange of contracts would happen on Friday, with completion 1 week later. It all worked fine.

But maybe the situation is a little different at the moment because of Covid. But all property purchases come with risk - you just have to assess that risk.

For example, there are a different set of risks associated with buying an owner/occupied property. You're likely to be at the bottom of a chain of maybe 3,4,5 etc transactions. If there's a problem with any one of those transactions, the chain might fall apart.

Or if your seller can't find a place to buy, or finds out they can't get a mortgage, or has a change of circumstances they might decide not to sell to you - so you'v wasted fees.

At least none of those risks would apply with the tenanted property that you're looking at.

Mahsroh

sharp910sh said:

Foolishly decided to see the property. Thought maybe it's worth seeing it, but the estate agent put me off even more telling me "the tenants are happy to stay, if you want to buy the property as an investment". He also said there will leave within 3 months as they are nice to the landlord. Right. 

He confirmed that he will not give them 3 months notice (when it should be 6 months) until he has accepted an offer. He literally wants his cake and eat it. Wonder why he thinks he can break the law and only give them 3 months rather than 6 and think they will leave without an issue. 

A, pole, touch, barge, with, don't.

Re-arrange as appropriate.

The property should CLEARLY be listed to investors only. Even if their tenants do genuinely have good intentions to move out in 3 months, there is no guarantee they'd find something else in that time frame in the current market.   

MaryNB

sharp910sh said:

Foolishly decided to see the property. Thought maybe it's worth seeing it, but the estate agent put me off even more telling me "the tenants are happy to stay, if you want to buy the property as an investment". He also said there will leave within 3 months as they are nice to the landlord. Right. 

He confirmed that he will not give them 3 months notice (when it should be 6 months) until he has accepted an offer. He literally wants his cake and eat it. Wonder why he thinks he can break the law and only give them 3 months rather than 6 and think they will leave without an issue. 

Are in NI by any chance? It's currently 12 weeks there.

3card

You say that the vendor wont issue eviction notices until an offer as been accepted.
If still interested make an acceptable offer but dont action any solicitors, surveys, etc until its empty.

As a previous buyer of a property with tenants in situ it worked fine with us because we were actually looking at an investment and they were great tenants

sharp910sh

MaryNB said:

sharp910sh said:

Foolishly decided to see the property. Thought maybe it's worth seeing it, but the estate agent put me off even more telling me "the tenants are happy to stay, if you want to buy the property as an investment". He also said there will leave within 3 months as they are nice to the landlord. Right. 

He confirmed that he will not give them 3 months notice (when it should be 6 months) until he has accepted an offer. He literally wants his cake and eat it. Wonder why he thinks he can break the law and only give them 3 months rather than 6 and think they will leave without an issue. 

Are in NI by any chance? It's currently 12 weeks there.

In England. 
The property is perfect. I can put an offer in and do nothing, I would miss the stamp duty deadline. However, I would be able to save for the stamp duty in 2-3 months. Therefore rather than buying in June would be pushed back to around September, this is not an issue. However, if they leave after 6 months, I would just be annoyed having to wait a total of 6 months doing nothing and only spending money after they have vacated. 

Mahsroh

sharp910sh said:

MaryNB said:

sharp910sh said:

Foolishly decided to see the property. Thought maybe it's worth seeing it, but the estate agent put me off even more telling me "the tenants are happy to stay, if you want to buy the property as an investment". He also said there will leave within 3 months as they are nice to the landlord. Right. 

He confirmed that he will not give them 3 months notice (when it should be 6 months) until he has accepted an offer. He literally wants his cake and eat it. Wonder why he thinks he can break the law and only give them 3 months rather than 6 and think they will leave without an issue. 

Are in NI by any chance? It's currently 12 weeks there.

In England. 
The property is perfect. I can put an offer in and do nothing, I would miss the stamp duty deadline. However, I would be able to save for the stamp duty in 2-3 months. Therefore rather than buying in June would be pushed back to around September, this is not an issue. However, if they leave after 6 months, I would just be annoyed having to wait a total of 6 months doing nothing and only spending money after they have vacated. 

That’s if they do leave after 6 months. 6 months could potentially just be the start of a lengthy eviction process.

7ames101

Although I'd also think it's best to leave such a situation alone if buying for any reason other than to be LL to existing tenants... Just as an option if you were particularly keen to try to find a way to make it work: You could ask your solicitor if an agreement can be built in (or alongside) the main sale paperwork which involves the LL guaranteeing vacant possession, with clear penalty (perhaps per day) if it's not vacated on agreed date.

However, if this is a possibility at all, I would only imagine it working if the purchase doesn't involve a mortgage. I would think any lender for a mortgage for anything except BTL would be perturbed by there being tenants in situ.

Personally I would regard tenants in situ alone as a recipe for trouble and so, alone, would be seeking to beat the SDD, which makes both those issues together a pretty strong motive to leave it.

sharp910sh

I think I will just leave it. Its a shame as it is the best property I have seen in the area. But it seems the owner is not interested in selling. He will not even give notice to the tenants until an offer is accepted. He is worried that if the buyer pulls out he will be without his rent. I think he will only give notice once the contracts are exchanged...

The search continues!