Sale fallen through, what do I do next?

pjs493

Back in February I told the tenant of my late husband’s rental property that I would need to sell the property in order to buy a suitable house for me and our children following his unexpected death (currently living in accommodation that came with his job).

I gave the tenant first refusal. They seemed super keen and eager, asked for a couple of weeks to ensure they had the deposit, could get a mortgage, etc and made me a formal offer in March. Two local estate agents came in to give valuations which were identical to the valuation I had done for Probate, so the price was agreed and accepted. It’s a private sale so no memo of sale from an estate agent. I’ve relied on updates from him with regards to his solicitor’s progress. 

In late April, I found the perfect house and had an offer accepted. With the sale of the rental property (I’m the beneficiary of my husband’s estate) and savings I’m a cash buyer. There is no other chain as the house I’m buying is the vendor’s second home. 

Long story short, it transpires that the tenant has been giving me the run around and despite sending me evidence of searches being ordered, engaging his solicitor, proof of mortgage offer, etc, it’s all been a lie. Initially they claimed they’d had issues with their solicitor so instructed a new one, but yesterday my solicitor called me to say they’ve yet to hear anything from the buyer’s second solicitor (never heard from the first one either). 

I’ve told the tenant that I have no choice but to evict them and sell the property to release the equity. I’ve found the forms on the gov website that I need to use to give him notice to vacant. 

My purchase was on the market for about a year when my offer was accepted. There have been a couple of delays from their end but before I realised my buyer has been taking me for a fool, the purchase overtook the sale despite the sale being a couple of months ahead of the purchase. 

The sale was originally supposed to complete end of June with purchase due to complete early August. In time for the new school term starting in September. 

It’s going to be two months before the tenant moves out (assuming they leave at the end of the notice period and don’t make it go to court). It screws up school for the children and will make me homeless as I have to move out of my current accommodation by October. 

I’m worried my purchase will fall through. The tenant is currently not responding to my texts or calls after I realised they’ve messed me around. So I don’t know how difficult they’ll be with an eviction. 

Should I ask my solicitor to chase the buyer’s solicitor to double check that it’s not all some misunderstanding? Am I able to contact their solicitor directly? If an estate agent was involved with the sale they’d obviously be chasing things. My solicitor only realised something was wrong with the buyer’s first solicitor when they sent lease docs and received a reply stating my buyer wasn’t one of their clients. The buyer said they’d had numerous issues with that solicitor so moved to a more reputable firm, draft contracts, lease docs, etc were sent to them over a month ago and my solicitor hasn’t heard from them. 

Should I tell the vendor’s estate agent straight away and explain the situation? What’s the correct protocol? 

It all seemed so simple when the tenant said they wanted to buy. In hindsight I can’t believe I was taken in by their excuses and false documents confirming they’d paid their solicitor for searches, etc. A copy of their mortgage offer, etc. It all appears to have been faked as a delay tactic and now they’ve ran out of excuses and what at the time seemed to be genuine delays, it appears the game is up. 

If I was able to keep the rental property on I would, but it would mean getting a mortgage and mortgage companies won’t take the rental income into consideration because it forms part of my husband’s estate. I’ve considered a bridging loan so as not to delay my purchase, but I know these come with risks and can be expensive. 

Apologies for the long post but I wanted to include as much info as possible to avoid having to answer lots of questions. 

tealady

Didnt want to read and run but I would read the sticky at the top about how to evict a tenant. Then go through your form with a fine tooth comb. Any errors or omissions could set you back months.
How was the house held? Was it in joint names or solely in your husbands? Did he make a will? Finally where in the UK is this house (laws are different in Scotland, England and Wales).
Honestly I'm not being nosy, just want to make sure you get the best advice.

BarelySentientAI

Hiding the situation from other people in the chain is unlikely to be helpful.

After all, that's what the tenant has done and looks at how it's frustrated you.

Flugelhorn

tealady said:

Didnt want to read and run but I would read the sticky at the top about how to evict a tenant. Then go through your form with a fine tooth comb. Any errors or omissions could set you back months.
How was the house held? Was it in joint names or solely in your husbands? Did he make a will? Finally where in the UK is this house (laws are different in Scotland, England and Wales).
Honestly I'm not being nosy, just want to make sure you get the best advice.

have a look at this thread - the OP is in accommodation that was provided by her husband's employer (military ) - he had a rental property which is the one being sold - lots to juggle! https://forums.moneysavingexpert.com/discussion/6506680/implications-of-keeping-inherited-property-and-buying-a-home-to-live-in#latest

Tiglet2

pjs493 said:

Back in February I told the tenant of my late husband’s rental property that I would need to sell the property in order to buy a suitable house for me and our children following his unexpected death (currently living in accommodation that came with his job).

I gave the tenant first refusal. They seemed super keen and eager, asked for a couple of weeks to ensure they had the deposit, could get a mortgage, etc and made me a formal offer in March. Two local estate agents came in to give valuations which were identical to the valuation I had done for Probate, so the price was agreed and accepted. It’s a private sale so no memo of sale from an estate agent. I’ve relied on updates from him with regards to his solicitor’s progress. 

In late April, I found the perfect house and had an offer accepted. With the sale of the rental property (I’m the beneficiary of my husband’s estate) and savings I’m a cash buyer. There is no other chain as the house I’m buying is the vendor’s second home. 

Long story short, it transpires that the tenant has been giving me the run around and despite sending me evidence of searches being ordered, engaging his solicitor, proof of mortgage offer, etc, it’s all been a lie. Initially they claimed they’d had issues with their solicitor so instructed a new one, but yesterday my solicitor called me to say they’ve yet to hear anything from the buyer’s second solicitor (never heard from the first one either). 

I’ve told the tenant that I have no choice but to evict them and sell the property to release the equity. I’ve found the forms on the gov website that I need to use to give him notice to vacant. 

My purchase was on the market for about a year when my offer was accepted. There have been a couple of delays from their end but before I realised my buyer has been taking me for a fool, the purchase overtook the sale despite the sale being a couple of months ahead of the purchase. 

The sale was originally supposed to complete end of June with purchase due to complete early August. In time for the new school term starting in September. 

It’s going to be two months before the tenant moves out (assuming they leave at the end of the notice period and don’t make it go to court). It screws up school for the children and will make me homeless as I have to move out of my current accommodation by October. 

I’m worried my purchase will fall through. The tenant is currently not responding to my texts or calls after I realised they’ve messed me around. So I don’t know how difficult they’ll be with an eviction. 

Should I ask my solicitor to chase the buyer’s solicitor to double check that it’s not all some misunderstanding? Am I able to contact their solicitor directly? If an estate agent was involved with the sale they’d obviously be chasing things. My solicitor only realised something was wrong with the buyer’s first solicitor when they sent lease docs and received a reply stating my buyer wasn’t one of their clients. The buyer said they’d had numerous issues with that solicitor so moved to a more reputable firm, draft contracts, lease docs, etc were sent to them over a month ago and my solicitor hasn’t heard from them. 

Should I tell the vendor’s estate agent straight away and explain the situation? What’s the correct protocol? 

It all seemed so simple when the tenant said they wanted to buy. In hindsight I can’t believe I was taken in by their excuses and false documents confirming they’d paid their solicitor for searches, etc. A copy of their mortgage offer, etc. It all appears to have been faked as a delay tactic and now they’ve ran out of excuses and what at the time seemed to be genuine delays, it appears the game is up. 

If I was able to keep the rental property on I would, but it would mean getting a mortgage and mortgage companies won’t take the rental income into consideration because it forms part of my husband’s estate. I’ve considered a bridging loan so as not to delay my purchase, but I know these come with risks and can be expensive. 

Apologies for the long post but I wanted to include as much info as possible to avoid having to answer lots of questions. 

No, don't contact the buyer's solicitor.  You are not their client (by the sounds of it, neither is the buyer) and they will not speak to you.  Probably pointless to ask your solicitor to chase.  If the buyer's solicitor hasn't been formally instructed then no work has been done and the solicitor doesn't have the buyer as a client.

Could you get a normal repayment mortgage on the property you are buying, so that your purchase can go ahead independently of this sale?  Then, when the sale does go through and you have the sale monies, pay the mortgage off (as long as you haven't elected for a fixed term which limits how much you can pay off in any one year). 

I think you may as well go ahead and serve the tenants with notice - making sure you don't make any mistakes on the notice.  Do you think the tenants want to be made homeless so that the Council has to rehome them?  It might be that they have spoken to the Citizens Bureau where they have been advised to stay put until the courts/bailiffs evict, otherwise the Council won't help them.  

I don't understand what you mean about not being able to obtain a mortgage because the rental income forms part of your husband's estate.  Now you have probate and have inherited the estate, the rental income and property is now yours.  The tenants now pay you, don't they?  So, you could keep the property with a mortgage, though a buy to let mortgage will be more expensive than a residential mortgage.  You get the rental income to offset the mortgage, but would you still need a residential mortgage on your purchase?  Depends on which way you want to do this.

FlorayG

That's a horrible situation to be in and it's going to take you six months to get your tenants out because clearly they're not going to be helpful and leave when their 2 months notice is up; then after that you will need to redecorate, market and sell the property, probably another six months. If you can find any way to move yourself without the proceeds of that house sale, I would do it and pay off whatever you borrow with the proceeds when you eventually get them

Albermarle

FlorayG said:

That's a horrible situation to be in and it's going to take you six months to get your tenants out because clearly they're not going to be helpful and leave when their 2 months notice is up; then after that you will need to redecorate, market and sell the property, probably another six months. If you can find any way to move yourself without the proceeds of that house sale, I would do it and pay off whatever you borrow with the proceeds when you eventually get them

A bridging loan ?

propertyrental

First off, no you are not a 'cash buyer'. You do not have the cash, you are dependent on a sale.

Evicting the tenant is obviously the next step, in order to market and find a new buyer, but

a) you must get the process right (see 83 Qs in link below) and

b) it's highly unlikely the T will move out after 2 months so expect a long wait.

No you can't contact the 'buyers' solicitor - and anyway what's the point?

Yes you should be upfront with your sellers.

https://nearlylegal.co.uk/section-21-flowchart/

sheramber

Tiglet2 said:

pjs493 said:

Back in February I told the tenant of my late husband’s rental property that I would need to sell the property in order to buy a suitable house for me and our children following his unexpected death (currently living in accommodation that came with his job).

I gave the tenant first refusal. They seemed super keen and eager, asked for a couple of weeks to ensure they had the deposit, could get a mortgage, etc and made me a formal offer in March. Two local estate agents came in to give valuations which were identical to the valuation I had done for Probate, so the price was agreed and accepted. It’s a private sale so no memo of sale from an estate agent. I’ve relied on updates from him with regards to his solicitor’s progress. 

In late April, I found the perfect house and had an offer accepted. With the sale of the rental property (I’m the beneficiary of my husband’s estate) and savings I’m a cash buyer. There is no other chain as the house I’m buying is the vendor’s second home. 

Long story short, it transpires that the tenant has been giving me the run around and despite sending me evidence of searches being ordered, engaging his solicitor, proof of mortgage offer, etc, it’s all been a lie. Initially they claimed they’d had issues with their solicitor so instructed a new one, but yesterday my solicitor called me to say they’ve yet to hear anything from the buyer’s second solicitor (never heard from the first one either). 

I’ve told the tenant that I have no choice but to evict them and sell the property to release the equity. I’ve found the forms on the gov website that I need to use to give him notice to vacant. 

My purchase was on the market for about a year when my offer was accepted. There have been a couple of delays from their end but before I realised my buyer has been taking me for a fool, the purchase overtook the sale despite the sale being a couple of months ahead of the purchase. 

The sale was originally supposed to complete end of June with purchase due to complete early August. In time for the new school term starting in September. 

It’s going to be two months before the tenant moves out (assuming they leave at the end of the notice period and don’t make it go to court). It screws up school for the children and will make me homeless as I have to move out of my current accommodation by October. 

I’m worried my purchase will fall through. The tenant is currently not responding to my texts or calls after I realised they’ve messed me around. So I don’t know how difficult they’ll be with an eviction. 

Should I ask my solicitor to chase the buyer’s solicitor to double check that it’s not all some misunderstanding? Am I able to contact their solicitor directly? If an estate agent was involved with the sale they’d obviously be chasing things. My solicitor only realised something was wrong with the buyer’s first solicitor when they sent lease docs and received a reply stating my buyer wasn’t one of their clients. The buyer said they’d had numerous issues with that solicitor so moved to a more reputable firm, draft contracts, lease docs, etc were sent to them over a month ago and my solicitor hasn’t heard from them. 

Should I tell the vendor’s estate agent straight away and explain the situation? What’s the correct protocol? 

It all seemed so simple when the tenant said they wanted to buy. In hindsight I can’t believe I was taken in by their excuses and false documents confirming they’d paid their solicitor for searches, etc. A copy of their mortgage offer, etc. It all appears to have been faked as a delay tactic and now they’ve ran out of excuses and what at the time seemed to be genuine delays, it appears the game is up. 

If I was able to keep the rental property on I would, but it would mean getting a mortgage and mortgage companies won’t take the rental income into consideration because it forms part of my husband’s estate. I’ve considered a bridging loan so as not to delay my purchase, but I know these come with risks and can be expensive. 

Apologies for the long post but I wanted to include as much info as possible to avoid having to answer lots of questions. 

No, don't contact the buyer's solicitor.  You are not their client (by the sounds of it, neither is the buyer) and they will not speak to you.  Probably pointless to ask your solicitor to chase.  If the buyer's solicitor hasn't been formally instructed then no work has been done and the solicitor doesn't have the buyer as a client.

Could you get a normal repayment mortgage on the property you are buying, so that your purchase can go ahead independently of this sale?  Then, when the sale does go through and you have the sale monies, pay the mortgage off (as long as you haven't elected for a fixed term which limits how much you can pay off in any one year). 

I think you may as well go ahead and serve the tenants with notice - making sure you don't make any mistakes on the notice.  Do you think the tenants want to be made homeless so that the Council has to rehome them?  It might be that they have spoken to the Citizens Bureau where they have been advised to stay put until the courts/bailiffs evict, otherwise the Council won't help them.  

I don't understand what you mean about not being able to obtain a mortgage because the rental income forms part of your husband's estate.  Now you have probate and have inherited the estate, the rental income and property is now yours.  The tenants now pay you, don't they?  So, you could keep the property with a mortgage, though a buy to let mortgage will be more expensive than a residential mortgage.  You get the rental income to offset the mortgage, but would you still need a residential mortgage on your purchase?  Depends on which way you want to do this.

Presumably the rental  is till part of the estate and has not been transferred to the OP. Rental money will go into the estate. 

If it was transferred into her name then she could have  pay additional stamp duty on the purchase of a house before the rental property was sold.

Thete is some exemption involving military personnel but I do not know the  requirements or if it would apply to the OP. 

ReadySteadyPop

propertyrental said:

First off, no you are not a 'cash buyer'. You do not have the cash, you are dependent on a sale.

Evicting the tenant is obviously the next step, in order to market and find a new buyer, but

a) you must get the process right (see 83 Qs in link below) and

b) it's highly unlikely the T will move out after 2 months so expect a long wait.

No you can't contact the 'buyers' solicitor - and anyway what's the point?

Yes you should be upfront with your sellers.

https://nearlylegal.co.uk/section-21-flowchart/

Good advice.

pjs493

sheramber said:

Tiglet2 said:

pjs493 said:

Back in February I told the tenant of my late husband’s rental property that I would need to sell the property in order to buy a suitable house for me and our children following his unexpected death (currently living in accommodation that came with his job).

I gave the tenant first refusal. They seemed super keen and eager, asked for a couple of weeks to ensure they had the deposit, could get a mortgage, etc and made me a formal offer in March. Two local estate agents came in to give valuations which were identical to the valuation I had done for Probate, so the price was agreed and accepted. It’s a private sale so no memo of sale from an estate agent. I’ve relied on updates from him with regards to his solicitor’s progress. 

In late April, I found the perfect house and had an offer accepted. With the sale of the rental property (I’m the beneficiary of my husband’s estate) and savings I’m a cash buyer. There is no other chain as the house I’m buying is the vendor’s second home. 

Long story short, it transpires that the tenant has been giving me the run around and despite sending me evidence of searches being ordered, engaging his solicitor, proof of mortgage offer, etc, it’s all been a lie. Initially they claimed they’d had issues with their solicitor so instructed a new one, but yesterday my solicitor called me to say they’ve yet to hear anything from the buyer’s second solicitor (never heard from the first one either). 

I’ve told the tenant that I have no choice but to evict them and sell the property to release the equity. I’ve found the forms on the gov website that I need to use to give him notice to vacant. 

My purchase was on the market for about a year when my offer was accepted. There have been a couple of delays from their end but before I realised my buyer has been taking me for a fool, the purchase overtook the sale despite the sale being a couple of months ahead of the purchase. 

The sale was originally supposed to complete end of June with purchase due to complete early August. In time for the new school term starting in September. 

It’s going to be two months before the tenant moves out (assuming they leave at the end of the notice period and don’t make it go to court). It screws up school for the children and will make me homeless as I have to move out of my current accommodation by October. 

I’m worried my purchase will fall through. The tenant is currently not responding to my texts or calls after I realised they’ve messed me around. So I don’t know how difficult they’ll be with an eviction. 

Should I ask my solicitor to chase the buyer’s solicitor to double check that it’s not all some misunderstanding? Am I able to contact their solicitor directly? If an estate agent was involved with the sale they’d obviously be chasing things. My solicitor only realised something was wrong with the buyer’s first solicitor when they sent lease docs and received a reply stating my buyer wasn’t one of their clients. The buyer said they’d had numerous issues with that solicitor so moved to a more reputable firm, draft contracts, lease docs, etc were sent to them over a month ago and my solicitor hasn’t heard from them. 

Should I tell the vendor’s estate agent straight away and explain the situation? What’s the correct protocol? 

It all seemed so simple when the tenant said they wanted to buy. In hindsight I can’t believe I was taken in by their excuses and false documents confirming they’d paid their solicitor for searches, etc. A copy of their mortgage offer, etc. It all appears to have been faked as a delay tactic and now they’ve ran out of excuses and what at the time seemed to be genuine delays, it appears the game is up. 

If I was able to keep the rental property on I would, but it would mean getting a mortgage and mortgage companies won’t take the rental income into consideration because it forms part of my husband’s estate. I’ve considered a bridging loan so as not to delay my purchase, but I know these come with risks and can be expensive. 

Apologies for the long post but I wanted to include as much info as possible to avoid having to answer lots of questions. 

No, don't contact the buyer's solicitor.  You are not their client (by the sounds of it, neither is the buyer) and they will not speak to you.  Probably pointless to ask your solicitor to chase.  If the buyer's solicitor hasn't been formally instructed then no work has been done and the solicitor doesn't have the buyer as a client.

Could you get a normal repayment mortgage on the property you are buying, so that your purchase can go ahead independently of this sale?  Then, when the sale does go through and you have the sale monies, pay the mortgage off (as long as you haven't elected for a fixed term which limits how much you can pay off in any one year). 

I think you may as well go ahead and serve the tenants with notice - making sure you don't make any mistakes on the notice.  Do you think the tenants want to be made homeless so that the Council has to rehome them?  It might be that they have spoken to the Citizens Bureau where they have been advised to stay put until the courts/bailiffs evict, otherwise the Council won't help them.  

I don't understand what you mean about not being able to obtain a mortgage because the rental income forms part of your husband's estate.  Now you have probate and have inherited the estate, the rental income and property is now yours.  The tenants now pay you, don't they?  So, you could keep the property with a mortgage, though a buy to let mortgage will be more expensive than a residential mortgage.  You get the rental income to offset the mortgage, but would you still need a residential mortgage on your purchase?  Depends on which way you want to do this.

Presumably the rental  is till part of the estate and has not been transferred to the OP. Rental money will go into the estate. 

If it was transferred into her name then she could have  pay additional stamp duty on the purchase of a house before the rental property was sold.

Thete is some exemption involving military personnel but I do not know the  requirements or if it would apply to the OP. 

The rental was solely in my husband’s name and the rental income was declared solely through his tax return. Some years ago we did consider adding me to the mortgage, but we were advised against this so I could retain my FTB status (plan was for us to buy a second rental property in my sole name and then sell both to buy a forever home at retirement). 

It remains in my late husband’s name and forms part of the estate, so while I have inherited it along with everything else. I was advised to keep it in his name until it was sold and inherit the proceeds of the sale rather than transfer it into my name in order to retain FTB status. 

It’s important for me to retain FTB status to avoid a large SDLT bill. There are military exceptions, but it would be quite complex in my case because I never properly lived in the property. While it was big enough for a guy with a girlfriend visiting, it isn’t big enough for a family of four with two dogs, so there is a question, theoretically, as to whether it would be the family home if not for the exigences of military life. In other words if my husband hadn’t been in the military we would have likely sold it when we got married and bought a home more suited to a newly married couple planning a family. 

The rental income forms part of the estate and because it was always declared on my husband’s tax return (despite us sharing finances and the income going into our joint account), mortgage companies wouldn’t include the rental income in their assessment of my income until/unless it was in my name for three years. So I was left with no option but the sell the property. Without the rental income I’m not able to obtain a mortgage for the full shortfall between savings and purchase price (current cash in bank is about 75% of purchase price). 

The mortgage remaining on the rental property was paid off when Probate was granted. Ironically if I’d remortgaged the rental into my name the money I used to pay off the mortgage would have been enough to be be a true cash buyer.