Buying a flat with vacant possession.

DaveS23

Hi,
I am thinking of putting an offer in for a 2 bed leasehold flat and need some advice (FTB). The flat is currently tenanted , it was first put on the market to be sold with tenants-in-situ as an investment opportunity,  Zoopla states first listed in on 9th November 2021. It was recently reduced in value (230k to 220k) and the advert was change to state ‘the property will be vacant from December and ready to move into’. The EA advised this was because it was not selling as an investment opportunity. I have had 2 viewings and the flat seems in good condition with everything working (new build , 2011). On the first visit the estate agent advised that the tenants were aware of needing to be out in December (when there contract expires) if the buyer is expecting to move in. On the second visit one of the tenants (the daughter) asked me ‘are you going to be living in this flat if you buy?’ Which was a bit awkward ! The mother (who was present) seems like she does not speak English . After the viewing I brought this up with the estate agent (who are currently also managing the tenancy) who advised that there might be language barrier and they would check it out with the landlord. The landlord informed the EA that they would inform the tenants that they would need to leave at the end of their tenancy when and if it is sold with a buyer expecting vacant possession. I do like this flat and it is a good location. I have flexibility in my moving date as I am on a periodic monthly tenancy in my current flat. Firstly , does this situation seems right ? Secondly , if I did make an offer and proceeded is there anything I should do / be aware of ? Lastly , if it did fall through or was delayed what sort of costs am I likely to incur (arrangement fee, broker fee , survey etc ?).

lika_86

They might expect the tenants to move out, but that doesn't mean they will. If they refuse to move out then an eviction could take months, which may mean you need to extend your mortgage offer or get a new one. 

DaveS23

lika_86 said:

They might expect the tenants to move out, but that doesn't mean they will. If they refuse to move out then an eviction could take months, which may mean you need to extend your mortgage offer or get a new one. 

I have been suggested a mortgage from Santander and apparently their offers last 7 months

searchlight123

You should go nowhere near to exchange of contracts until it can be shown to you that the tenants have moved out and you will have vacant possession. You would then view the property again just prior to exchange to make sure it has been left in  a reasonable / acceptable condition, before going any further.

The landlord is trying to have his cake and eat it. He should not be marketing this as a vacant possession until it is. He is trying to maximise his rental income. There would be nothing to stop the tenants deciding to stay on and if you have exchanged contracts in the meantime you will become an 'accidental landlord' with all the grief and responsibility that brings.

Don't do it. Certainly not under his (or the EA's) say so that the tenants will be gone by completion.

user1977

tonygold said:

The landlord is trying to have his cake and eat it. He should not be marketing this as a vacant possession until it is. He is trying to maximise his rental income. 

It sounds more like he's marketing it both at buyers who do and don't want vacant possession, and then deciding what to do based on the acceptable offer.

DaveS23

user1977 said:

tonygold said:

The landlord is trying to have his cake and eat it. He should not be marketing this as a vacant possession until it is. He is trying to maximise his rental income. 

It sounds more like he's marketing it both at buyers who do and don't want vacant possession, and then deciding what to do based on the acceptable offer.

That’s what I thought. If I understand correctly I don’t think I would be allowed to exchange contracts until vacant possession anyway ?

eddddy

DaveS23 said:

That’s what I thought. If I understand correctly I don’t think I would be allowed to exchange contracts until vacant possession anyway ?

There's nothing to say you're not allowed.

But the seller's solicitor would strongly advise the seller not to do that. If the seller exchanges contracts (offering vacant possession), then the tenants refuse to move out before the completion, the seller would be in breach of contract - and you could probably claim any resulting financial losses from the seller.

And you'd be left in limbo if you've given notice to your current landlord. Your solicitor should advise you of those risks.

But if you and the seller both insist on exchanging contracts with the tenants still in the property, you wouldn't be breaking any laws or regulations.

 

DaveS23

eddddy said:

DaveS23 said:

That’s what I thought. If I understand correctly I don’t think I would be allowed to exchange contracts until vacant possession anyway ?

There's nothing to say you're not allowed.

But the seller's solicitor would strongly advise the seller not to do that. If the seller exchanges contracts (offering vacant possession), then the tenants refuse to move out before the completion, the seller would be in breach of contract - and you could probably claim any resulting financial losses from the seller.

And you'd be left in limbo if you've given notice to your current landlord. Your solicitor should advise you of those risks.

But if you and the seller both insist on exchanging contracts with the tenants still in the property, you wouldn't be breaking any laws or regulations.

 

Thanks , so if there was an exchange of contracts (offering vacant possession ) and the tentants did not move out by the agreed date and I had to find alternative accommodation / storage then I could claim those costs from the seller ?

user1977

DaveS23 said:

eddddy said:

DaveS23 said:

That’s what I thought. If I understand correctly I don’t think I would be allowed to exchange contracts until vacant possession anyway ?

There's nothing to say you're not allowed.

But the seller's solicitor would strongly advise the seller not to do that. If the seller exchanges contracts (offering vacant possession), then the tenants refuse to move out before the completion, the seller would be in breach of contract - and you could probably claim any resulting financial losses from the seller.

And you'd be left in limbo if you've given notice to your current landlord. Your solicitor should advise you of those risks.

But if you and the seller both insist on exchanging contracts with the tenants still in the property, you wouldn't be breaking any laws or regulations.

 

Thanks , so if there was an exchange of contracts (offering vacant possession ) and the tentants did not move out by the agreed date and I had to find alternative accommodation / storage then I could claim those costs from the seller ?

Yes. It's more a risk for the seller. Though you might want to avoid the practical hassle of not being able to move in on the intended date. Would be more of a concern if you were selling on the same day and had to live in your removal van.

DaveS23

user1977 said:

DaveS23 said:

eddddy said:

DaveS23 said:

That’s what I thought. If I understand correctly I don’t think I would be allowed to exchange contracts until vacant possession anyway ?

There's nothing to say you're not allowed.

But the seller's solicitor would strongly advise the seller not to do that. If the seller exchanges contracts (offering vacant possession), then the tenants refuse to move out before the completion, the seller would be in breach of contract - and you could probably claim any resulting financial losses from the seller.

And you'd be left in limbo if you've given notice to your current landlord. Your solicitor should advise you of those risks.

But if you and the seller both insist on exchanging contracts with the tenants still in the property, you wouldn't be breaking any laws or regulations.

 

Thanks , so if there was an exchange of contracts (offering vacant possession ) and the tentants did not move out by the agreed date and I had to find alternative accommodation / storage then I could claim those costs from the seller ?

Yes. It's more a risk for the seller. Though you might want to avoid the practical hassle of not being able to move in on the intended date. Would be more of a concern if you were selling on the same day and had to live in your removal van.

I guess there would be some hassle but I am not selling as FTB and live around the corner from the property.

macman

DaveS23 said:

eddddy said:

DaveS23 said:

That’s what I thought. If I understand correctly I don’t think I would be allowed to exchange contracts until vacant possession anyway ?

There's nothing to say you're not allowed.

But the seller's solicitor would strongly advise the seller not to do that. If the seller exchanges contracts (offering vacant possession), then the tenants refuse to move out before the completion, the seller would be in breach of contract - and you could probably claim any resulting financial losses from the seller.

And you'd be left in limbo if you've given notice to your current landlord. Your solicitor should advise you of those risks.

But if you and the seller both insist on exchanging contracts with the tenants still in the property, you wouldn't be breaking any laws or regulations.

 

Thanks , so if there was an exchange of contracts (offering vacant possession ) and the tentants did not move out by the agreed date and I had to find alternative accommodation / storage then I could claim those costs from the seller ?

No sane conveyancer would allow you to exchange without vacant possession. The LL here is clearly deluded, as he thinks that the end of the tenant's fixed term somehow ends their tenancy. It doesn't- only a court can end it. Once the fixed term ends in December, it becomes a periodic tenancy. The EA is equally clueless to say 'the contract expires'.
If you want to buy this, then tell the LL that he must issue an S21 if he wants to sell the property. The very earliest he can then expect to get possession is 2 months. If they stay put, a minimum of 5 months and possibly 8, depending on the court backlogs.
Don't spend any more on legal fees until he supplies a copy of the S21 to prove that he is actively trying to obtain vacant possession.
If you proceed without this, and then have to sue the LL, you may not ever recover your losses, and you will also inherit the existing tenants and have to seek possession yourself. Do you want to be a landlord?
It's not just 'some hassle' and a delayed moving in date.