Buying a house which currently has tenants in it

tallac

My father wishes to buy a property as vacant. However, the owner of the property is a live in landlord and the other rooms of the house have tenants in them (although I think the tenants are friends of the landlord). He says he needs to give 2 months notice for the tenants which he will do when exchange of contract happens and then the completion date would be whenever the end of the tenant notice period is.

However, this feels a little risky for my father as then there is a large gap of 2 months where any damage or carelessness to the property by the landlord/tenants will not affect them but my dad.

What normally happens in a situation where a rented property is being sold as vacant property. How is the notice period of the tenants handled? I understand from the landlords perspective that he wouldn't want to risk giving notice to his tenants if the sale fell through for whatever reason. However, how can my father be more protected if there is no way around the large 2 month gap between exchange of contract and completion? Could something be written into the contract by my father's conveyancers to ensure any significant damage done during the 2 months would need to be rectified by the seller?

Any help or advice would be greatly appreciated. Thank you.

user1977

The risk is more that the tenants fail to vacate on the desired date rather than they trash the place (which doesn't sound particularly likely, especially as it sounds like they're lodgers rather than tenants). What ought to normally happen is that the landlord procures vacant possession (or in this case, at least gets rid of the lodgers) before marketing.

RAS

If dad needs a mortgage, the provider will not allow exchange if there are tenants in the house, and may well insist that all the lodgers sign to confirm their departure before exchange can happen.

tallac

Father is doing cash purchase so mortgage issues. Also, I think my father's conveyancer is going to make it a condition in the house purchase contract that the house will be vacant on the completion date. If this condition is in place, then this should ensure that the house is vacant on completion date.

(correction: the other people in the house with the landlord are lodgers not tenants. Thanks @user1977 for pointing this out)

ProDave

If the landlords lives in the house and has people in other rooms, they are lodgers, not tenants.  Different rules will apply.  I am sure someone will be along to tell us the rights of lodgers in this situation.

user1977

tallac said:

Father is doing cash purchase so mortgage issues. Also, I think my father's conveyancer is going to make it a condition in the house purchase contract that the house will be vacant on the completion date. If this condition is in place, then this should ensure that the house is vacant on completion date.

No, all it will ensure is that (as is standard anyway) the vendor would be in breach of contract if they cannot provide vacant possession on the completion date. The risk is largely the vendor's, but it would be a PITA for everyone if completion ends up being delayed by weeks/months to get rid of the lodgers. 

charlotteo1988

We sold my nans house which had tenants in. The buyer was told there was tenants in and when they were due to leave. 

However…

the tenants were also buying a property and in a chain and that chain had delays so the tenants were in the house 3 months longer than expected. 

After a lot of angry emails as the tenants refused to leave until their property was completed they moved out on the Friday and the buyer moved in on the Monday. 

Luckily our buyer was understanding and wasn’t ready before hand anyways but if he was a cash buyer etc I think that may of been a different story and would of probably pulled out. 

This was quite a bad experience and covid didn’t really help as we couldn’t do anything about the tenants not wanting to leave. We were just lucky to have a understanding buyer. 

Might be worth trying to find out what the tenants/lodgers plans are. 

canaldumidi

If they are genuinely tenants, then the owner has to give them 2 months and then apply to court if they don't leave which could be another 6 months. Assuming the original 2 month norice was valid which often they aren't.

However, if he's a live-in andlord it is likely (not certain) they are lodgers, not tenants - in which case notice is whatever their contract says (often 1 weekor 1 month) and then the owner can remove them(ie change the locks).

So you need to establish firmly which.

If tenants- don't get involved. Either find another property, or wait for the tenants to vacate before spending a single penny on legals, survey etc.

If lofgers, don't worry.

theartfullodger

Even though he is currently a live in landlord he might not have been at some point in the occupants occupation, thus making them tenants 

I'd not touch this unless vacant, and I'd checked, before exchange.

tallac

theartfullodger said:

Even though he is currently a live in landlord he might not have been at some point in the occupants occupation, thus making them tenants 

I'd not touch this unless vacant, and I'd checked, before exchange.

Apologies for the naïve question but if my father wanted to exchange only if the house was already vacant, is there something in the contract to state that the house is vacant or will it be just on the word of the vendor? If the landlord says it's vacant when it's not, then how would the buyer be protected?

If it's just a case of the buyer would be in breach of contract, then wouldn't this be the same breach of contract situation as when the vendor said the house is rented at exchange but would be vacant in 2 months time at the time of completion and then the house isn't vacant. Both seem like they put the buyer in breach of contract. So, just wanted to understand how one is more protection than the other for the buyer?

Snookie12cat

I wouldn't exchange unless it's vacant. You run the risk of them not leaving more than anything else. 

Why can't the tenants be given notice and exchange and completion happen when they have left?