Selling a house that's currently rented out

theartfullodger

Yet another example of why not to to rent to friends or relatives.

Gycraig

theartfullodger said:

Yet another example of why not to to rent to friends or relatives.

Why is it ? Scenario would be exactly the same asking any tenant to move out after a year 

GDB2222

There’s something utterly wrong with the lender’s response here. They have given consent to let, and the OP has done so, acting in good faith.

 As the lender knows perfectly well, a tenancy cannot be ended overnight. There’s a legal process to follow, and it can take up to a year to get vacant possession. And that’s assuming that the fixed term has ended. The lender can reasonably expect the OP to follow through this process, but they seem to be expecting the OP to accelerate it somehow.  That’s unreasonable.

Although it is possible to sell the property with a sitting tenant, the market for such sales is small, and it is unlikely to fetch the best price. So, that’s unreasonable, too.

I expect that the best course might be to start the eviction process, so as to show willing. At the same time, I would make a formal complaint along the lines above and threaten to take the lender to the ombudsman. That whole process, if it goes to the ombudsman, would probably take as long as the eviction process anyway. 

Alderbank

GDB2222 said:

There’s something utterly wrong with the lender’s response here. They have given consent to let, and the OP has done so, acting in good faith.

 As the lender knows perfectly well, a tenancy cannot be ended overnight. There’s a legal process to follow, and it can take up to a year to get vacant possession. And that’s assuming that the fixed term has ended. The lender can reasonably expect the OP to follow through this process, but they seem to be expecting the OP to accelerate it somehow.  That’s unreasonable.

Although it is possible to sell the property with a sitting tenant, the market for such sales is small, and it is unlikely to fetch the best price. So, that’s unreasonable, too.

I expect that the best course might be to start the eviction process, so as to show willing. At the same time, I would make a formal complaint along the lines above and threaten to take the lender to the ombudsman. That whole process, if it goes to the ombudsman, would probably take as long as the eviction process anyway. 

That's why the lender gave the OP a year's grace. And if the eviction process had now been under way they would probably have extended for another year.

Waiting for the best price is completely unreasonable.
Generally speaking house prices steadily go up. Wait another year and you are likely to get a better price so waiting for the best price the house might never be sold.

GDB2222

Alderbank said:

GDB2222 said:

There’s something utterly wrong with the lender’s response here. They have given consent to let, and the OP has done so, acting in good faith.

 As the lender knows perfectly well, a tenancy cannot be ended overnight. There’s a legal process to follow, and it can take up to a year to get vacant possession. And that’s assuming that the fixed term has ended. The lender can reasonably expect the OP to follow through this process, but they seem to be expecting the OP to accelerate it somehow.  That’s unreasonable.

Although it is possible to sell the property with a sitting tenant, the market for such sales is small, and it is unlikely to fetch the best price. So, that’s unreasonable, too.

I expect that the best course might be to start the eviction process, so as to show willing. At the same time, I would make a formal complaint along the lines above and threaten to take the lender to the ombudsman. That whole process, if it goes to the ombudsman, would probably take as long as the eviction process anyway. 

That's why the lender gave the OP a year's grace. And if the eviction process had now been under way they would probably have extended for another year.

Waiting for the best price is completely unreasonable.
Generally speaking house prices steadily go up. Wait another year and you are likely to get a better price so waiting for the best price the house might never be sold.

According to the op, the lenders have not given a year’s grace. They gave permission to let for a year, and have decided not to renew it. That’s fair enough, but they then need to give the time needed to get the tenant out. I think that’s inherent in giving the permission in the first place. At least, that’s good grounds to make a complaint on. 

I would not gamble on prices going up this year!

gazfocus

Thanks for all the comments. To answer the queries:

No, unfortunately, they are unable to buy the house.

As Gycraig said, the situation would likely be the same if it were not family members. The only difference would be that a non-family member would likely be paying market rent so the prospect of paying a higher rent for a similar property wouldn't be an issue.

@GDB2222 To be honest, I don't have any interest in pursuing a complaint with the lender. Yes, the lender is being unfair (in my opinion) but we are in the situation we are in. The consent was never going to be permanent/long term and yes, I was under the impression I'd have enough time to arrange a BTL mortgage in 2 years time, but that was my assumption and not anything in writing from the lender.

To clarify, the lender gave consent to let and told me I'd need to renew it after 12 months and said the maximum period of consent to let was 3 years. At the time, they did not say anything to suggest the consent may not be forthcoming and made it sound very much like a formality. 

gazfocus

Also, should have mentioned, they have made it perfectly clear that they are no going to move to 'just anything' and are being very specific about what they're looking for.

Boat_to_Bolivia

gazfocus said:

Also, should have mentioned, they have made it perfectly clear that they are no going to move to 'just anything' and are being very specific about what they're looking for.

Seems you have a fight on your hands. Very sorry for you OP, after doing your relatives a good deed, they are not going to leave quietly. All the best.

Gavin83

I really wish you’d posted on here before you started renting the property as the advice would have been to stay well clear on this. Ultimately it’s a mess and there isn’t an easy solution to this. The way I see it you’ve got a few options:

1) Try and appeal to the lender. Probably won’t work but worth a go.

2) Speak to a broker and see if there’s any way you could get a buy to let mortgage.

3) Evict the relative and then sell as a vacant possession. This route likely won’t be quick though (6 months +) and you’ll almost certainly fall out with the relative and any others that take their side.

4) Sell to another landlord. The relative is likely to be upset with this though as ultimately the rent will increase substantially.

5) Speak to the relative, let them know the situation and that you can no longer afford the house. Ask them what their preference would be but let them know they can’t stay in the house long term at current rent. They’ll likely blame you for the situation and you’ll fall out regardless though.

I think you need to accept you’ve made a lot of mistakes here and aim to offload the house as quickly as possible. Then take this as a lesson learnt and never rent to a family member again nor lend them a lot of money. After all indirectly that’s what you’ve done and you’re about to find out how little they appreciate this assistance.

Sea_Shell

Boat_to_Bolivia said:

gazfocus said:

Also, should have mentioned, they have made it perfectly clear that they are no going to move to 'just anything' and are being very specific about what they're looking for.

Seems you have a fight on your hands. Very sorry for you OP, after doing your relatives a good deed, they are not going to leave quietly. All the best.

But there are 2 parties in this...

Their family who are renting from them were 'promised'* a long term home, hoping that, as they were renting from family, they wouldn't face eviction.   (short sighted and naïve on their part too)

Yes, they have had below market rent, but IMO they are the ones that are being 'thrown under the bus' here and are going to have their lives turned upside down.    Some kickback was inevitable.  Especially with limited choice of affordable or suitable properties available to move to.

Sadly the relationship may not survive intact.

Yes the situation the OP finds themselves in (with regards the mortgage) would be same with any tenant, but it wouldn't have the added emotional dimension if they were just "Mr & Mrs J Bloggs" as their tenants.   It would be a pure business decision.



* OP - What did you 'promise' them when the tenancy started, even if only verbal or even just inferred?   Have they a right to feel mislead too?