staying in the property after completion

LWP

Hi All

Long story short, we're about to exchange, complete chain: cash buyer (investor) -> us -> seller1 -> seller2 (moving in with a family). The process was slow as usual until suddenly last week we found out completion by the end of this month is possible. Our buyer now insists on completion before the deadline. We're ready (although not desperate) as well as seller1. The problem is the seller2 does not seem to be that bothered (no incentive as he's not buying anything now) and tells us he won't be able to move out until the first week of July.

Our buyer suggested we complete anyway and stay one week in the flat after completion, I guess we would have to agree the same with our seller... I know this is against the contract and would be based on trust only but we don't want to lose the sale.

I wonder whether anyone has done something similar?  

thanks in advance

SDLT_Geek

It is usually a criminal offence under the FCA “sale and rent back” rules for a buyer to buy a property and rent it back to the seller.  

The rule is there to protect vulnerable sellers, but applies much more widely.

MaryNB

It would be a very bad idea for your buyer to do that and I would presume their solicitor would advise against it. 

What happens if your onward sale falls through? Will you still move out after a week?

Would you paying rent to your buyer? If so you could end up being tenants and have legal rights to stay in the property. This could also constitute a Sale and Rent Back scenario which is illegal. 

LWP

Thanks for your replies.

There would be no rent to pay if everything works out but you're right the onward sale falling through would make it complicated... I guess we would have to stay until we find a rental property.

user1977

Mortgage lenders (assuming any are involved) won't permit it, your solicitors will advise strongly against it (and will tell lenders not to complete...), insurance policies won't be valid, actually kicking people out if they don't go voluntarily could be immensely time-consuming and expensive, and as above sale and rent back rules make it illegal...apart from all that it's a great idea.

Thrugelmir

LWP said:

 The problem is the seller2 does not seem to be that bothered (no incentive as he's not buying anything now) and tells us he won't be able to move out until the first week of July.

Reducing your offer to account for the stamp duty cost might focus his perspective. 

MaryNB

LWP said:

Thanks for your replies.

There would be no rent to pay if everything works out but you're right the onward sale falling through would make it complicated... I guess we would have to stay until we find a rental property.

And this is why it would be a VERY bad idea for the buyer to allow you to stay. I think however since you won't be paying rent you'll be an excluded occupier and the buyer only has to give you "reasonable notice" for you to leave. Defining how long "reasonable notice" is if you have no written agreement and have only been there a week could very messy. But it means you could end up homeless at short notice.

SDLT_Geek

MaryNB said:

LWP said:

Thanks for your replies.

There would be no rent to pay if everything works out but you're right the onward sale falling through would make it complicated... I guess we would have to stay until we find a rental property.

And this is why it would be a VERY bad idea for the buyer to allow you to stay. I think however since you won't be paying rent you'll be an excluded occupier and the buyer only has to give you "reasonable notice" for you to leave. Defining how long "reasonable notice" is if you have no written agreement and have only been there a week could very messy. But it means you could end up homeless at short notice.

Even without a rent it can get caught by the FCA rules.

LWP

I believe if we ALL exchange on the day that would not make anyone homeless, it would just mean moving at a later date with all the risks mentioned in previous posts.

LWP

Thrugelmir said:

LWP said:

 The problem is the seller2 does not seem to be that bothered (no incentive as he's not buying anything now) and tells us he won't be able to move out until the first week of July.

Reducing your offer to account for the stamp duty cost might focus his perspective. 

I was thinking that maybe mentioning this to their agent may do the trick...