Buying a house that has tenants living there currently

SmoggyGoose

I have found a property that suits my needs/criteria - size, budget, location.

However, the property is currently rented to tenants. I have advised the estate agent that I am interested in the property however my concern before offering is the possibility that at the point of exchanging contracts the tenants have not vacated. I am aware that without vacant possession prior to exchange, a lender will not approve a mortgage.

The estate agent has advised that the vendor has given prior notification to the tenant that they are looking to sell the property and that they will formally provide notice. I have advised the estate agent that under current rules, 6 months notice is required not 2 (as was pre pandemic) - estate agent has tried to assure me that the tenants will vacate the property within 2 months of an offer being accepted.

I wanted to canvas for thoughts on here on how to proceed or anything else I might have missed considering.

davidmcn

SmoggyGoose said:

I am aware that without vacant possession prior to exchange, a lender will not approve a mortgage.

Your awareness is a bit wrong there - lenders don't care what the position is at exchange (they're not involved in that), only that there is vacant possession at completion. You will probably want the tenants to be out before you exchange, rather than face a delay with completion because the tenants still haven't shifted.

You can get an offer accepted, and then just wait until the tenants have actually gone before you spend more time/money on the purchase. Chances are that the tenants will go long before 6 months are up, but there's no guarantee they'll have gone even after 6 months - that's just the trigger for the landlord to start eviction proceedings, which could take months more.

Scotbot

They may move within 2 months or they may not.  If they refuse then it could be up to a year or more if the landlord needs to evict them. If you offer I would suggest making it clear you won't start conveyancing and paying for a survey until the property is vacant. I would also be tempted to knock on the door and ask the tenants when they plan to leave.  What I would not do is believe the EA

moneysavinghero

Estate Agents are famous for their integrity and honesty so if they tell you the tenants will be gone within 2 months then you can take this a a cast iron guarantee. Of course on the off-chance that you happen have got unlucky and have the one-and-only slippery EA in the country then they may just be telling you what they think you want to hear. Maybe the LL is selling because the tenants are a pain, Maybe the tenants will wait for a court case (in about 12 months time) and maybe at that court case it will found that the S21 notice is invalid so the whole process will have to start over again. Maybe in 2023 you will finally be able to move into your house.

hopeitwill

We are at the other end of this situation and we're the tenants. Our landlord has sold the house and we have started buying a house but of course we cannot give our notice until we exchanged ourselves. Our landlord gave us "notice" for us to leave in 2 months over a text (which is absurd), which we contested and said it is 6 months and we're still not given a valid S21. And our purchase is taking veeery long. I don't think we would want to leave before we found a suitable place if the worst happened and our purchase fell through. Do not believe the EA and ask if they have been given a formal notice and when that was. 

secla

We are also on the other side of this, given 6 months notice as the landlord wants to sell
Of course im going to do everything i can to move out in that time but im also not going to make myself intentionally homeless, even with the best of intentions some tenants may just not be able to leave in the time frame given, Then of course there are the ones that just wont leave.
We had an estate agent call 2 days after recieving notice wanting photos to put the house on the market, I explained that it seemed a bit early considering we had 6 months to vacate but there being pretty insistent and think the house will be sold in 1-2 weeks, All this is going to do it hold up a chain and possibly make people drop out. IMO vacant possession is a must before thinking of putting a house up for sale especially in the current climate where removing tenants is a very lengthy process

niceguyed

It's not a must but eminently easier. I sold recently and had tenants. The tenants were not the issue in the end but rather my shady buyer but I digress. There are a lot of moving parts some of which as a buyer you won't be privy to. For example the relationship of the LL and the tenants and how well they have communicated their intention to sell. Some LLs want it both ways. They don't give tenants any pre-warning incase they leave quickly leaving the property empty before exchange. 
Tenants can also face issues, even with the means of securing another property whether that's purchase or rental. It can drag on and that's with a motivated tenant! 
A lot of this comes down to if the tenants really want to leave. 

How to proceed? It depends on your timescales and propensity to be patient. It sounds like you've found a property you like and one way to look at this is tenants in situ will likely put off some other buyers ergo reducing your competition (and scope to be gazumped). 

Transactions are a house of cards regardless of the situation. 

lookstraightahead

I've just bought a house and at the same time (purely by coincidence) the landlord of the property I am renting had served the compulsory 6 months notice. I'm using it as a crossover period but might hand in my notice sooner.

you can't expect tenants to just move out with nowhere to go, that's why these measures are put in place. Personally I would wait until it is empty - even if the right notice is served a tenant can refuse to leave.

2bFrank

Wait until its empty, you do not know what the tenants intentions are. For all you know the seller hasn't given the tenants correct notice, and if they play silly beggers, the tenants can refuse to move, hoping for a cash incentive to move on, even more so if the pressure is on to exchange.

Meanwhile you are too deep in the sale to back out, waiting months if not another year to exchange, with money sunk on searches and surveys. Meanwhile you have having to keep renewing and extending your mortgage, which is a pain at the best of times. Plus all the time you dont know the state of what the the tenants are going to leave the property, for all you know they hate their landlord and plan on stealing all the copper pipes as revenge, causing even more delays.

The seller wants his cake and eat it (i.e. no void periods until they sell), you will just be a casualty in this situation, until the property is vacant. My best advice is walk away until its empty or look for another property.