Can I let the Sellers stay in the house for 3 weeks?

lookstraightahead

steampowered said:

You could offer to pay for them to spend 3 weeks in a AirBnB, plus an extra few grand for their trouble?

If you spend £2k on their accomodation and £3k as a "sweetener", it's worth doing to save £15k in stamp duty.

They might say no, especially if they have young kids, but it might be worth asking. 

Why do they need to pay anything as a sweetener? They're unlikely to pull out. I think this theyre being ridiculous and in danger of losing a buyer. Who can't rent for three weeks? 

5 grand to let someone buy your house?

brianposter

I allowed the seller to stay in the house that I had bought for over a year. It caused no problem at all.

If you want to be safe you can surely put an appropriate penalty clause into the contract (or a separate contract) so that you retain some funds until handover.

Billy_B_North

Absolutely do not do this. It can turn into an absolute legal nightmare. What happens if they cause accidental damage, decide not to leave, or burn it down?
It’s nice to be nice, but you’d be better off paying for a hotel for them rather than doing this.
You need to take vacant possession at completion; please don’t open a large can of worms by trying to be helpful.

SDLT_Geek

brianposter said:

I allowed the seller to stay in the house that I had bought for over a year. It caused no problem at all.

Did you check that you were not committing an offence under the “sale and rent back” rules?  

Perhaps it was with a close family member where it is permitted without an authorisation from the FCA.

brianposter

SDLT_Geek said:

brianposter said:

I allowed the seller to stay in the house that I had bought for over a year. It caused no problem at all.

Did you check that you were not committing an offence under the “sale and rent back” rules?  

Is there any particular reason to suppose that this particular transaction would be covered by "sale and rent back" rules.

BabyStepper

For all we know, the sellers might have had buyers queueing down the road to buy their property - we have no reason to think they are desperate for a sale and will move out 3 weeks before they're ready. There may also be other complications, for example, sellers have a fee to pay on their mortgage if the sale happens at the end of June. 

OP, I think trying to be nice is a bad idea in this circumstance. Your solicitors need to be talking to each other to try and negotiate what is possible. It's great that you're willing to be flexible, and £15k is a lot of money but like you said, none of us knew the stamp duty break would be extended and you made your offer before you knew that. Sharing the cost between you would seem reasonable if you want the house badly enough. But do not enter into an informal agreement with them.   

 

SDLT_Geek

brianposter said:

SDLT_Geek said:

brianposter said:

I allowed the seller to stay in the house that I had bought for over a year. It caused no problem at all.

Did you check that you were not committing an offence under the “sale and rent back” rules?  

Is there any particular reason to suppose that this particular transaction would be covered by "sale and rent back" rules.

Yes.  You bought a house from a seller and allowed them to stay for over a year.  
But perhaps you came within an exception to the sale and rent back rules.  Perhaps they were close family.

brianposter

SDLT_Geek said:

brianposter said:

SDLT_Geek said:

brianposter said:

I allowed the seller to stay in the house that I had bought for over a year. It caused no problem at all.

Did you check that you were not committing an offence under the “sale and rent back” rules?  

Is there any particular reason to suppose that this particular transaction would be covered by "sale and rent back" rules.

Yes.  You bought a house from a seller and allowed them to stay for over a year.  
But perhaps you came within an exception to the sale and rent back rules. 

Perhaps you could start by explaining where any "rent back" occurs.

SDLT_Geek

As I recall it, the "rent back" leg can be by tenancy or by licence, with or without a payment.

You could find more out about it on the FCA website here: https://www.handbook.fca.org.uk/handbook/PERG/1/?view=chapter and especially here: https://www.handbook.fca.org.uk/handbook/PERG/14/5.html

GDB2222

brianposter said:

I allowed the seller to stay in the house that I had bought for over a year. It caused no problem at all.

If you want to be safe you can surely put an appropriate penalty clause into the contract (or a separate contract) so that you retain some funds until handover.

How long ago was this? The rules on this only came into force around 15 years ago.  Or, you may have broken the law and got away with it. I’m not sure you should be encouraging others, though.

@SDLT_Geek is absolutely right to flag this up as a potential problem. I can’t see the FCA being terribly interested once they understood the arrangement, but it could put the two solicitors in a difficult situation. I think they would have an obligation to report it.

Besides that, as a buyer, would you really want to have your £15k stamp duty saving depend on an illegal transaction?