Purchasing BTL but vendor wants to stay on - can we issue tenancy to vendor?

SDLT_Geek

peterhjohnson said:

Around 15 years ago, a friend put her flat on the market and had a quick offer from a BTL landlord.
As she had not yet identified her onward purchase, she arranged to remain as a tenant. I think it took about 6 months for her to find her new home and move out. I don't know the full details but it seemed to "work" to the satisfaction of all parties.

Yes, the criminality of a "one off" transaction only came in from 31 December 2014.

p00hsticks

dimbo61 said:

You MUST have everything in place in order to rent the property.
EPC rating of E or better still C ( as its for sale what is the current EPC ?)

Or an exemption issued if above E......

Slithery

That's because it didn't used to be illegal.

BlueC

Quick update....

As it turns out our solicitor wasn't concerned with the "legality" of it and actually seemed to think it was ok in that respect, although not advisable for several other reasons. However, he pointed out that the mortgage company have a standard condition of offer that reads as follows...

Our Solicitor must report to us (if they are made aware) that there is likelihood of the Property being let to the current or any previous registered owner(s) during the term of the mortgage.

We queried this with the mortgage lender and they confirmed they won't lend if the property is to be let to any previous registered owner.

So that's that then. Back to the drawing board.

in_my_wellies

I just read this out of interest. 
Can someone explain to me why buy and rent back is not allowed? It does seems a sensible solution but in my naivety I'm obviously missing something. Thanks 

BlueC

in_my_wellies said:

I just read this out of interest. 
Can someone explain to me why buy and rent back is not allowed? It does seems a sensible solution but in my naivety I'm obviously missing something. Thanks 

I understand it's because companies were using it as a way of buying properties below market value (e.g. distressed sale, owner in financial difficulty, etc) and then booting the owner out after they had purchased it.

pinkteapot

Just a comment - no help to OP... The legislation, which I assume is what's led to the mortgage clause mentioned above, seems seriously OTT in applying to one-off instances (i.e. where it's the only time a landlord's doing it, or say the only time every X years). 

Back in 2008 I think it was, I was selling a flat and planned to go into rented while then looking for a house. By chance, a BTL investor bought the flat and it was unbelievably convenient to be able to switch from owning to renting the flat, without having to move. Suited the investor down to the ground too as they had a tenant from day 1 who they knew had always looked after the property well. I rented it for a year or so if I remember rightly. 

I 100% support the clampdown on unscrupulous companies, but they seem to have used a hammer to crack a nut here. Just my view. 

eddddy

in_my_wellies said:

I just read this out of interest. 
Can someone explain to me why buy and rent back is not allowed? It does seems a sensible solution but in my naivety I'm obviously missing something. Thanks 

It used to be allowed and unregulated.

But in 2008 the Office of Fair Trading investigated the practice and found it was doing serious harm to vulnerable home owners. 

So it became regulated by the FSA/FCA, and all the commercial companies doing it at that time decided to close down their operations (or were told to close down by the FSA).

I guess there were a few fair, decent, honest individuals doing it - but the potential harm caused by the bad guys heavily outweighed the good side.