Advice on buying buy2let with tenants

user1977

GemmaZE said:

 We have checked our Mortgage offer. HMO is allowed

I doubt they'll accept completing on an unlicensed HMO, which appears to be what you're contemplating.

GemmaZE

elsien said:

GemmaZE said:

elsien said:

And the plan for if the tenants decline to leave in October and you have to go to court to evict them? 

And if there should be a licence but isn’t, then are all the fines and penalties likely to come down on you as the current landlord? 

What is your target market for tenants instead of having an HMO? 

Thanks for your reply. We obvious want to avoid the trouble. I am worried about fines and penalty involve as it has been let without license for a long period of the time.

our target market is family, not HMO.

You really need to resolve that before you exchange - is there a reason the current landlord isn’t looking at the licensing now (other than wanting to pass the buck)?  

If the current tenants do hold out for being evicted (and they may not), you’re aware of just how long this could take? 

Have you looked into whether  there are any factors which could make their notice to quit invalid? 

From my research, the HMO criteria changes recently and their contract was 3 yr long with 2 yr break clause. Could be the case it wasn’t HMO before but it is now.

letsbetfair

GemmaZE said:

elsien said:

And the plan for if the tenants decline to leave in October and you have to go to court to evict them? 

And if there should be a licence but isn’t, then are all the fines and penalties likely to come down on you as the current landlord? 

What is your target market for tenants instead of having an HMO? 

Thanks for your reply. We obvious want to avoid the trouble. I am worried about fines and penalty involve as it has been let without license for a long period of the time.

our target market is family, not HMO.

If you want a trouble-free buy, this doesn't sound like it! You'll be taking on the problem of an unlicensed HMO let and (assuming you want new tenants in) evicting the current tenants. If you are going to buy it tenanted, then evicting good, paying tenants - assuming they are - to relet seems to be making trouble for yourself.

newsgroupmonkey_

Whether a license is required retrospectively after a contract is signed therefore would be a question to the council. I don't suppose there's any harm in asking (providing you don't mention the address)

user1977 said:I doubt they'll accept completing on an unlicensed HMO, which appears to be what you're contemplating.

It may not be thrown out for an HMO even if unlicensed. It may be that the mortgage company, however, use the AST valuation rather than HMO (which clearly, would normally be more).

Each case is taken on merits and depends on the lender.

Cakeguts

How many tenants are there?  HMOs with more than 6 tenants need planning permission.  You need to check to see if there is planning permission for change of use? 

elsien

Cakeguts said:

How many tenants are there?  HMOs with more than 6 tenants need planning permission.  You need to check to see if there is planning permission for change of use? 

4, according to the OP. 

GemmaZE

Lover_of_Lycra said:

elsien said:

GemmaZE said:

elsien said:

And the plan for if the tenants decline to leave in October and you have to go to court to evict them? 

And if there should be a licence but isn’t, then are all the fines and penalties likely to come down on you as the current landlord? 

What is your target market for tenants instead of having an HMO? 

Thanks for your reply. We obvious want to avoid the trouble. I am worried about fines and penalty involve as it has been let without license for a long period of the time.

our target market is family, not HMO.

You really need to resolve that before you exchange - is there a reason the current landlord isn’t looking at the licensing now (other than wanting to pass the buck)?  

If the current tenants do hold out for being evicted (and they may not), you’re aware of just how long this could take? 

Have you looked into whether  there are any factors which could make their notice to quit invalid? 

We know that if a Section 21 has been issued and the property doesn’t have a licence but should then the notice will be invalid. 

https://www.legislation.gov.uk/ukpga/2004/34/section/98

Thanks for raising this. We didn't know section 21 is invalid if not licensed.. 
We've expressed this to vendor via EA. Will see what they say tomorrow and what options we have. 
It does feel like:  either the vendor manage to compensate to evict the tenants early for the property to be vacant ahead of the exchange, or we'll have to wait for them to vacant the property which will be end of Oct for exchange/completion. 

It's not ideal situation, we'll just have to get on with it. 

GemmaZE

newsgroupmonkey_ said:

Whether a license is required retrospectively after a contract is signed therefore would be a question to the council. I don't suppose there's any harm in asking (providing you don't mention the address)

user1977 said:I doubt they'll accept completing on an unlicensed HMO, which appears to be what you're contemplating.

It may not be thrown out for an HMO even if unlicensed. It may be that the mortgage company, however, use the AST valuation rather than HMO (which clearly, would normally be more).

Each case is taken on merits and depends on the lender.

Super good point!.  will see if I can find more information on the council website. Thanks for the tips. 
We have raised this with our mortgage broker on the HMO issue, will see if our mortgage allows us.  

Slithery

GemmaZE said:
...or we'll have to wait for them to vacant the property which will be end of Oct for exchange/completion. 

As has been repeatedly pointed out to you the tenants don't have to leave when their notice expires. It could take years to evict them if it's even possible at all.

dimbo61

So you have seen the EPC which is band "C" or better ?
Gas Safe Certificate ? 
EICR ?
Fire safety up to standard required by council for HMO.
Please tell me it's only 2 storey ?
Fit for human habitation ?
Fire doors, mains wired interlinked smoke alarms and carbon monoxide alarms ?
Emergency lighting and turnlocks on fire escape doors ?
HMO licence costs about £900/1,000+ in many areas and requires a Council hmo inspection.
BedRoom sizes ? Kitchen /Living areas size ?
Good luck with this but I think your barking mad to consider this and waste money on trying to buy 

PS HMO landlord who bought a run down  property and spent a whole lot of money fighting council to get extension done