Temporary renting of newly-purchased house to vendor

debmouse

The vendor of the house we are buying would like to stay in the house after completion (hopefully before June 30th!) for about six weeks, until the house they're buying is vacant. They are happy to pay us rent.
It's a short chain, we are not buying with a mortgage, and we're happy with the arrangement as we have somewhere to go in the intervening period. We also did the same thing ourselves last time we moved, about 20 years ago, to cover the gap between completion and being able to physically move into the property, so the principle doesn't bother us.
Does anyone know of an off-the-shelf rental agreement we can access? Anything else we should consider? Any advice or thoughts welcome. 

Slithery

What happens if the vendor loses their onward purchase or just changes their mind?

You could be stuck with them in your property for years before you can legally evict them.

Davesnave

You should consider the fact that it might take a year to get them out if the owner decides they'd rather stay longer than anticipated. What if their deal falls through? Courts are running late due to the emergency Convid legislation etc. 20 years ago was another world.

user1977

debmouse said:

Any advice or thoughts welcome. 

It's a terrible idea. They can find somewhere else to stay.

moneysavinghero

As you are a cash buyer, why not wait until they are ready to move before you exchange and complete?

AdrianC

You may also wish to look into the legality of Sale-and-Rent-Back without an FCA licence...

SDLT_Geek

If you look up about "buy and rent back" you will find that it is illegal in most situations under financial services rules to rent back a property to a seller.  In theory it can be done with an authorisation from the FCA, but I do not believe there are any active auhorisations as present.

maisie_cat

No, and no again several times.

GeordieGeorge

It’s an absolutely terrible idea. For one thing your mortgage offer will have been based on you taking vacant possession in order to complete, which you now won’t be, so you’ll need to change to a buy-to let mortgage ahead of the purchase. That will have different rates, affordability criteria and deposit requirements. Do you even know if you’ll qualify for a BTL mortgage?

You’ll then have all the normal obligations of a landlord, and no guarantee whatsoever that your tenants will happily walk away leaving you an immaculate and undamaged house on the date that you’d like to move in. What do you intend to do if they manage to burn it down in the interim, or just start treating it as some people do treat rental homes, and not looking after it properly?

sparklep0ny

GeordieGeorge said:

It’s an absolutely terrible idea. For one thing your mortgage offer will have been based on you taking vacant possession in order to complete, which you now won’t be, so you’ll need to change to a buy-to let mortgage ahead of the purchase. That will have different rates, affordability criteria and deposit requirements. Do you even know if you’ll qualify for a BTL mortgage?

You’ll then have all the normal obligations of a landlord, and no guarantee whatsoever that your tenants will happily walk away leaving you an immaculate and undamaged house on the date that you’d like to move in. What do you intend to do if they manage to burn it down in the interim, or just start treating it as some people do treat rental homes, and not looking after it properly?

OP is a cash buyer.

user1977

GeordieGeorge said:

For one thing your mortgage offer will have been based on you taking vacant possession in order to complete, which you now won’t be, so you’ll need to change to a buy-to let mortgage ahead of the purchase. That will have different rates, affordability criteria and deposit requirements. Do you even know if you’ll qualify for a BTL mortgage?

They've told us they're a cash buyer, so at least that's not an issue. Agree with all the rest though!