Buying a home to live in that has a tenant in situ need advice

GDB2222

If there’s anything left in the flat when you get to the point of being about to exchange, you can get the seller to confirm it is all theirs and whether it’s going to be removed at completion or included in the sale. If you don’t want it, then insist it’s removed by completion. But, you probably can’t pick and choose which items to keep and which ones you want removed!

All this needs to go through the solicitor so it’s included in the contract. But, you are miles better off than with an owner occupied property, where there are no end of stories about sheds, garages and lofts being left stuffed full of junk. At least, the property should be mostly empty by the time contracts are exchanged. 

owls1867

SneakySpectator said:

saajan_12 said:

SneakySpectator said:

RAS said:

SneakySpectator said:

RAS said:

Why can't you get a mortgage longer than 25 years? 30+ is pretty normal now.

Inflation will eat into the cost of your repayments within say 5 years. It'd be reasonable to expect to clear a 35 year deal in 25 years.

Because I'm 36... A 25 year mortgage is already making me work until 61, I really don't want to be working into my 70's. 

When your mortgage becomes a smaller portion of your living costs, you overpay. I actually started with a 15% mortgage, oh joy, but when the rate halved, I decided to pay a little more than half each month. That soon cut the amount of capital I owed, which began a virtuous cycle so I paid off 75% in the next 15 years.

This makes a lot of sense actually. I thought you get charged for making overpayments though?

lincroft1710 said:

SneakySpectator said:

RAS said:

Why can't you get a mortgage longer than 25 years? 30+ is pretty normal now.

Inflation will eat into the cost of your repayments within say 5 years. It'd be reasonable to expect to clear a 35 year deal in 25 years.

Because I'm 36... A 25 year mortgage is already making me work until 61, I really don't want to be working into my 70's. 

A 30 year mortgage would take you to 66 yrs old by which time state pensions may not start until the age of 70. My mortgage wasn't paid off until I was 68, but my work pension adequately covered the repayments.


Trying to buy a tenanted property is not a sensible idea, the vendor is seemingly offloading their property portfolio but for whatever reason is unable to get the tenant to leave.

Yeah I'm having second thoughts as well now, the estate agent straight up told me that once we are further down the line and close to sealing everything, the tenants will be issued their section 21 notice. 

So I'm looking at 2 months of conveyancing before the section 21 even gets issued, then 2 months notice for that, then if they refuse to leave another few months, then court orders, repossession order etc. I was "assured" by the EA that 

"I’ve spoken with the owner, and he has confirmed he will give notice to the tenants when we are further along the legal process, and we won’t exchange contracts until the tenants have moved out and you’ve viewed again to ensure that your happy. You solicitor will also advise to view the property prior to exchange anyway."

But I've not even done an initial survey yet and I don't want to start sinking solicitor fees into this only for it to drag out for half a year only to find out there's some major issue after the tenant left. 

In principle I'm not entirely against starting the conveyancing process in parallel with waiting for the S21 - its a risk, but can pay off if its a property you really want and most tenants do leave per a S21, even if they don't have to. 

However a chain free, freehold property sale has every chance of completing within 2 months, so it could all align if the S21 was already served. Still waiting and expecting the buyer to expend money while the LL won't even send a piece of paper is VERY cheeky. 

If you really liked this property, I would take back some control and say you'd like to place an offer but conditional on the LL serving S21 notice to the tenant FIRST and a letter from the tenant confirming they plan to leave upon expiry. Or better still, conditional on the LL speaking to the tenant, agreeing a termination date and formalising that via a notice from the tenant to the Landlord with expiry = 2 months from now. 
If not forthcoming, then walk away. 

I tried this but the EA came back saying the LL doesn't want to evict the tenant and then I back out of the deal down the line and now the LL has a property with no income, which is understandable. 

But once the initial things have been done and we've progressed a little, I'm going to demand the LL issue the S21 notice, I've shown commitment on my end, now he needs to show commitment on his end. 

Thing is I don't know what the norm is and to be honest if I was a seller I too would want to keep the tenant in there until the last minute if possible too. But at some point the seller is going to have to evict them because I ain't singing nothing until they've been evicted, furniture removed, keys handed back.

Just a course of point - Don't rely on the S21 and automatically thinking the tenants will be out when it expires in 2 months time when the landlord sends it. 

If the tenant stays after the expiry date then they will have even longer to wait to get it empty whilst it goes through court and even longer if the tenant defends it. You're at the mercy of the courts. 

There is also a Renters Bill coming into effect soon which will give tenants even more protection and abolish S21 evictions. I think the notice period then to get the house back is actually 3 months!

You definitely want the house as vacant if you can. 

RAS

The OP doesn't "want the house as vacant if you can." 

The deal with any sale is that the seller provides vacant possession and if the OP has a mortgage, that needs to happen. The OP won't be allowed to exchange contracts unless the tenant has vacated and taken their furniture. The LL needs to remove everything else prior to completion.

RHemmings

RAS said:

The OP doesn't "want the house as vacant if you can." 

The deal with any sale is that the seller provides vacant possession and if the OP has a mortgage, that needs to happen. The OP won't be allowed to exchange contracts unless the tenant has vacated and taken their furniture. The LL needs to remove everything else prior to completion.

There are sales where a house is sold with tenant in situ. In which case vacant possession isn't provided. However, that isn't relevant to the current thread as presumably the OP and OP's solicitor would reject any contract not contracting to provide vacant possession.

ReadySteadyPop

SneakySpectator said:

saajan_12 said:

SneakySpectator said:

RAS said:

SneakySpectator said:

RAS said:

Why can't you get a mortgage longer than 25 years? 30+ is pretty normal now.

Inflation will eat into the cost of your repayments within say 5 years. It'd be reasonable to expect to clear a 35 year deal in 25 years.

Because I'm 36... A 25 year mortgage is already making me work until 61, I really don't want to be working into my 70's. 

When your mortgage becomes a smaller portion of your living costs, you overpay. I actually started with a 15% mortgage, oh joy, but when the rate halved, I decided to pay a little more than half each month. That soon cut the amount of capital I owed, which began a virtuous cycle so I paid off 75% in the next 15 years.

This makes a lot of sense actually. I thought you get charged for making overpayments though?

lincroft1710 said:

SneakySpectator said:

RAS said:

Why can't you get a mortgage longer than 25 years? 30+ is pretty normal now.

Inflation will eat into the cost of your repayments within say 5 years. It'd be reasonable to expect to clear a 35 year deal in 25 years.

Because I'm 36... A 25 year mortgage is already making me work until 61, I really don't want to be working into my 70's. 

A 30 year mortgage would take you to 66 yrs old by which time state pensions may not start until the age of 70. My mortgage wasn't paid off until I was 68, but my work pension adequately covered the repayments.


Trying to buy a tenanted property is not a sensible idea, the vendor is seemingly offloading their property portfolio but for whatever reason is unable to get the tenant to leave.

Yeah I'm having second thoughts as well now, the estate agent straight up told me that once we are further down the line and close to sealing everything, the tenants will be issued their section 21 notice. 

So I'm looking at 2 months of conveyancing before the section 21 even gets issued, then 2 months notice for that, then if they refuse to leave another few months, then court orders, repossession order etc. I was "assured" by the EA that 

"I’ve spoken with the owner, and he has confirmed he will give notice to the tenants when we are further along the legal process, and we won’t exchange contracts until the tenants have moved out and you’ve viewed again to ensure that your happy. You solicitor will also advise to view the property prior to exchange anyway."

But I've not even done an initial survey yet and I don't want to start sinking solicitor fees into this only for it to drag out for half a year only to find out there's some major issue after the tenant left. 

In principle I'm not entirely against starting the conveyancing process in parallel with waiting for the S21 - its a risk, but can pay off if its a property you really want and most tenants do leave per a S21, even if they don't have to. 

However a chain free, freehold property sale has every chance of completing within 2 months, so it could all align if the S21 was already served. Still waiting and expecting the buyer to expend money while the LL won't even send a piece of paper is VERY cheeky. 

If you really liked this property, I would take back some control and say you'd like to place an offer but conditional on the LL serving S21 notice to the tenant FIRST and a letter from the tenant confirming they plan to leave upon expiry. Or better still, conditional on the LL speaking to the tenant, agreeing a termination date and formalising that via a notice from the tenant to the Landlord with expiry = 2 months from now. 
If not forthcoming, then walk away. 

I tried this but the EA came back saying the LL doesn't want to evict the tenant and then I back out of the deal down the line and now the LL has a property with no income, which is understandable. 

But once the initial things have been done and we've progressed a little, I'm going to demand the LL issue the S21 notice, I've shown commitment on my end, now he needs to show commitment on his end. 

Thing is I don't know what the norm is and to be honest if I was a seller I too would want to keep the tenant in there until the last minute if possible too. But at some point the seller is going to have to evict them because I ain't singing nothing until they've been evicted, furniture removed, keys handed back.

I would demand they start eviction now (they probably won`t do it) What happens if the notice is issued after you have progressed a little and spent some money maybe and the tenant says they are challenging it through the courts? The landlord is too greedy to take a loss, just tell them that you are only interested in empty properties.

ReadySteadyPop

SneakySpectator said:

HouseMartin567 said:

Perhaps you could agree to have the survey done, and once that comes back ‘clear’ then the vendor should serve notice. It does mean a financial commitment from you, but there are lots of threads about people reducing offers or withdrawing after a survey so I can kind of see why a landlord may want to wait until after that point before serving notice (not saying I agree with the approach - I think they shouldn’t have marketed it until empty).

The thing I have a problem with is I'm chain free but the seller is not. Well they are in the sense they're not waiting for a completion of their own to go through, but they have tenants actively living in the property and the seller is trying to treat his sale like he's "chain free" when he's not really. 

I am ready to go at the drop of a hat while the seller is not, yet the seller is the one trying to dictate all the terms. If he wants to sell the property, get rid of the current tenants, but he is trying to milk every penny from them by letting them live there and only giving them a section 21 notice at the final hurdle. 

This could create a massive delay for me, while I'm waiting for this whole thing to go through and potentially tenants resisting eviction or just straight up refusing to leave. I could be missing out on some other really nice vacant properties.

I want to move asap, not be waiting around for tenants that may or may not delay the process by 6+ months... And then at the very end the tenant could cause serious damage to the property and the entire thing falls through anyway. 

The fact that the landlord is clinging on to the tenant is a red flag, maybe they know demand for property in the area is not very strong, are you sure you are not overpaying?

RHemmings

ReadySteadyPop said:

SneakySpectator said:

HouseMartin567 said:

Perhaps you could agree to have the survey done, and once that comes back ‘clear’ then the vendor should serve notice. It does mean a financial commitment from you, but there are lots of threads about people reducing offers or withdrawing after a survey so I can kind of see why a landlord may want to wait until after that point before serving notice (not saying I agree with the approach - I think they shouldn’t have marketed it until empty).

The thing I have a problem with is I'm chain free but the seller is not. Well they are in the sense they're not waiting for a completion of their own to go through, but they have tenants actively living in the property and the seller is trying to treat his sale like he's "chain free" when he's not really. 

I am ready to go at the drop of a hat while the seller is not, yet the seller is the one trying to dictate all the terms. If he wants to sell the property, get rid of the current tenants, but he is trying to milk every penny from them by letting them live there and only giving them a section 21 notice at the final hurdle. 

This could create a massive delay for me, while I'm waiting for this whole thing to go through and potentially tenants resisting eviction or just straight up refusing to leave. I could be missing out on some other really nice vacant properties.

I want to move asap, not be waiting around for tenants that may or may not delay the process by 6+ months... And then at the very end the tenant could cause serious damage to the property and the entire thing falls through anyway. 

The fact that the landlord is clinging on to the tenant is a red flag, maybe they know demand for property in the area is not very strong, are you sure you are not overpaying?

We know exactly why the landlord wants to keep the tenant in the property as the OP has been told and has reported it here. The landlord wants to minimise the void between the tenant leaving and the property selling. It's as simple as that. 

ReadySteadyPop

RHemmings said:

ReadySteadyPop said:

SneakySpectator said:

HouseMartin567 said:

Perhaps you could agree to have the survey done, and once that comes back ‘clear’ then the vendor should serve notice. It does mean a financial commitment from you, but there are lots of threads about people reducing offers or withdrawing after a survey so I can kind of see why a landlord may want to wait until after that point before serving notice (not saying I agree with the approach - I think they shouldn’t have marketed it until empty).

The thing I have a problem with is I'm chain free but the seller is not. Well they are in the sense they're not waiting for a completion of their own to go through, but they have tenants actively living in the property and the seller is trying to treat his sale like he's "chain free" when he's not really. 

I am ready to go at the drop of a hat while the seller is not, yet the seller is the one trying to dictate all the terms. If he wants to sell the property, get rid of the current tenants, but he is trying to milk every penny from them by letting them live there and only giving them a section 21 notice at the final hurdle. 

This could create a massive delay for me, while I'm waiting for this whole thing to go through and potentially tenants resisting eviction or just straight up refusing to leave. I could be missing out on some other really nice vacant properties.

I want to move asap, not be waiting around for tenants that may or may not delay the process by 6+ months... And then at the very end the tenant could cause serious damage to the property and the entire thing falls through anyway. 

The fact that the landlord is clinging on to the tenant is a red flag, maybe they know demand for property in the area is not very strong, are you sure you are not overpaying?

We know exactly why the landlord wants to keep the tenant in the property as the OP has been told and has reported it here. The landlord wants to minimise the void between the tenant leaving and the property selling. It's as simple as that. 

The landlord will probably lose the sale by doing that though.

ReadySteadyPop

SneakySpectator said:

RHemmings said:

m0bov said:

The LL is profiting by keeping rent coming in whilst it's for sale. The buyer is taken the risks whilst the LL profits.

I don't think it's simple as that it's the buyer taking the risk. When contracts are exchanged, these will typically be for vacant possession. Therefore, if exchange does happen and the tenant is still there, then the landlord will most definitely legally be on the hook. 

Therefore, the seller may not want to exchange while the tenant is there. If exchange then gets pushed back because the tenant doesn't leave, then there is the risk that the buyer pulls out, and both seller and buyer lose out.

It's often been advised on here to not sink money into the purchase until the property is vacant. If the buyer says that the purchase will stall until the tenant has moved out, then it will be possible to see how the seller reacts.

If I was the buyer, I would make it very clear that no exchange of contracts will happen unless the contract is for vacant possession. And that exchange of contracts is expected by <date>. 

GDB2222 said:

Even if the op finds an owner occupied flat to buy, there’s plenty of opportunity for that transaction to fall through, too. How do you calculate the difference in the risks? 

(Cut and paste of comment failed. Italics are the quote)

This is very true; there are all sorts of things that can derail a purchase. But, here we're talking about one particular problem. Which it appears that the OP's seller is making a bigger risk by not giving notice. E.g. in the following quote from the OP.

SneakySpectator said:

Yeah I'm having second thoughts as well now, the estate agent straight up told me that once we are further down the line and close to sealing everything, the tenants will be issued their section 21 notice. 

So I'm looking at 2 months of conveyancing before the section 21 even gets issued, then 2 months notice for that, then if they refuse to leave another few months, then court orders, repossession order etc. I was "assured" by the EA that 

"I’ve spoken with the owner, and he has confirmed he will give notice to the tenants when we are further along the legal process, and we won’t exchange contracts until the tenants have moved out and you’ve viewed again to ensure that your happy. You solicitor will also advise to view the property prior to exchange anyway."

But I've not even done an initial survey yet and I don't want to start sinking solicitor fees into this only for it to drag out for half a year only to find out there's some major issue after the tenant left. 

So solicitor I'm using has a no deal no fee structure, so yes I would lose out on some initial costs but the bulk of the costs would be refunded to me if the deal falls through. 

Also while the estate agent did say the seller won't evict until we're further along the process, she did assure me that no contracts will be exchanged until the tenant is out of the property, furniture cleared out and keys handed back. 

 How many offers on the property did the seller get?

SneakySpectator

ReadySteadyPop said:

SneakySpectator said:

HouseMartin567 said:

Perhaps you could agree to have the survey done, and once that comes back ‘clear’ then the vendor should serve notice. It does mean a financial commitment from you, but there are lots of threads about people reducing offers or withdrawing after a survey so I can kind of see why a landlord may want to wait until after that point before serving notice (not saying I agree with the approach - I think they shouldn’t have marketed it until empty).

The thing I have a problem with is I'm chain free but the seller is not. Well they are in the sense they're not waiting for a completion of their own to go through, but they have tenants actively living in the property and the seller is trying to treat his sale like he's "chain free" when he's not really. 

I am ready to go at the drop of a hat while the seller is not, yet the seller is the one trying to dictate all the terms. If he wants to sell the property, get rid of the current tenants, but he is trying to milk every penny from them by letting them live there and only giving them a section 21 notice at the final hurdle. 

This could create a massive delay for me, while I'm waiting for this whole thing to go through and potentially tenants resisting eviction or just straight up refusing to leave. I could be missing out on some other really nice vacant properties.

I want to move asap, not be waiting around for tenants that may or may not delay the process by 6+ months... And then at the very end the tenant could cause serious damage to the property and the entire thing falls through anyway. 

The fact that the landlord is clinging on to the tenant is a red flag, maybe they know demand for property in the area is not very strong, are you sure you are not overpaying?

I am over paying slightly, by about 5% but I think it's worth it for 2 reasons. The first being that it has just had a new boiler installed about a year ago and secondly, the flat is completely detached on all sides, just 1 point of contact, the floor. 

From what I can tell, there are only 6 top floor corner flats in the complex and only 1 of them is up for sale. There are slightly cheaper flats that are identical pretty much but they're not top floor, and the ones that are top floor have 2 points of contact instead of the 1. 

Noise is a really big issue for me so I put a lot of value on that.