Thinking of buying a cheap house but it has a "Tenant in situ" ... implications?

jpe20

Hi folks,

Looking in the paper this week I have seen a property I have been half interested in (not viewed yet because it was too dear) be reduced in price from 195K to 160K. Mysteriously it is now showing the term "Tenant in situ" in the advert.

I am intending to buy and move in, so how easy would it be to kick out the tenants? Is this simply too much hassle or a waste of time? Can the tenant be difficult if he/she wants to stay?

Remember this would be my first home ie I would not be buying this as a buy-to-let opportunity.

Any tips on this situation appreciated.

Jools

PS My thinking is that if the tenant has a 3mths left on his tenancy agreement then I would be prepared to move into my parents house and wait to kick them out! Is this wishful thinking?

Turnbull2000

Kick them out

What a lovely way with words. "Kick" somebody out their home.

HugoSP

Turnbull2000 wrote: »

What a lovely way with words. "Kick" somebody out their home.

Maybe but the OP is asking us what his responsibilities are and how he needs to legally abide by them. The fact that he has chosen those words IMO doesn't imply that the tenant's real name is Rackman.

My first thoughts are that the tenant's occupation could cause issues with your lender as they would almost certainly want the property vacant posession, or insist you go for a buy to let mortgage. You'll need a good mortgage broker who can suggest a route to buy the property with one mortgage then go to another cheaper mortgage to save you money in the long term.

Secondly, I suspect that the tenancy agreement would be valid for a minimum of 6 months, as you quite rightly speculate, and that the term still has some months to run. Assuming this then I would want to see a copy of his tenancy agreement stipulating when it commenced. This will give you the earliest date that you could legally expect him/her to vacate if you serve the correct notices on the correct dates etc.

Thirdly, you need to know what deposit and advance rent (s)he has paid. This will need to be taken into account when contracts are exchanged, after all you don't want to have to find the deposit out of your own funds after the seller has disappeard into the mist with the original deposit, and any advance rent. Also you need to be clear that the rent paid for any remaining occupation is paid to you when the house is yours.

Finally, you need to be sure that this is not a sitting tenant. Sitting tenancies cannot legally be created now but there are still plenty of sitting tenants around. Sight of a tenancy agreement that the tenant acknowledges should put your mind at rest but sitting tenants have a right to stay in the property as long as they wish, and cannot legally be evicted or served notice unless they fall behind with rent.

Many years ago we looked at buying a property with a sitting tenant. She was paying the market rent but her presence basically halved the value of the house. Unfortunately for us she moved out before we got to see the house :mad:

jpe20

Thanks HugoSP for such a thoughtful reply.

I now have a few things to think about as the mortgage complications is something that would probably scupper this deal. Seems to me to be a bit of a gamble whether you will have a problem removing the tenant (sorry about the term "kick"). As I cannot really afford to waste too much time removing the tenant I need to carefully weigh up the risk/benefit of this move.

Good point about the deposit and advance rent as I had not thought of that yet.

About a sitting tenant .... Would I be right in saying that as the house in question is relatively new (under 7yrs old) that I would be unlikely to have a sitting tenant.

Thanks for the detailed advice so far.

Jools

Doozergirl

Yes, it won't be a sitting tenant with a property that new. The law changed in 1988/89 sometime.

It may be that the tenant can be served notice with a view to them moving out before you exchange contracts, so if the tenant is around for viewings, ask them what they think of the situation.

I went to view a property today that has tenants. The board went up earlier in the week and the EA did explain but the first they heard from the landlord was yesterday! That's totally apalling behaviour by the LL. There is the risk that they don't move out despite being served notice, but we were chatting and told them that we had just moved out of a rented house - and guess what - they're moving in to our old house!! So I know these people are going. Tenants are fabulous when you view a property as they'll tell you what's wrong I'd try and get a word in with them - I'm sure they'll be open about what their plans are!

clutton_2

if you really want this house, and can wait a while, insist that the vendor sells with "vacant possession" then it is up to him to get the tenant out before you exchange. You will not be able to buy this on a REsidential mortgage with a tenant in situ - nor would it be sensible to try to get a BTL mortgage initially

neverdespairgirl

jpe20 wrote: »

I am intending to buy and move in, so how easy would it be to kick out the tenants? Is this simply too much hassle or a waste of time? Can the tenant be difficult if he/she wants to stay?

I agree with other posters that "kick out" is a touch insensitive.

They are almost certainly on an AST, which could be 6 or 12 months. If they only moved in a week ago, you couldn't get them to move out until at least 6 months is up from the date they moved in.

And if they don't go then, you'd have to evict them, which would add more time.

Poppy9

clutton wrote: »

if you really want this house, and can wait a while, insist that the vendor sells with "vacant possession" then it is up to him to get the tenant out before you exchange.

but then the asking price for the house will rise. The house has been reduced because it has a tennant in it.

macaque_2

jpe20 wrote: »

Hi folks,

Looking in the paper this week I have seen a property I have been half interested in (not viewed yet because it was too dear) be reduced in price from 195K to 160K. Mysteriously it is now showing the term "Tenant in situ" in the advert.

I am intending to buy and move in, so how easy would it be to kick out the tenants? Is this simply too much hassle or a waste of time? Can the tenant be difficult if he/she wants to stay?

Remember this would be my first home ie I would not be buying this as a buy-to-let opportunity.

Any tips on this situation appreciated.

Jools

PS My thinking is that if the tenant has a 3mths left on his tenancy agreement then I would be prepared to move into my parents house and wait to kick them out! Is this wishful thinking?

Some home owners get into financial difficulty and end up losing the house. These are mostly sad and regrettable outcomes. If this happens to you however, I hope you will let us know so that I can be there with my deck chair and flask of coffee to enjoy the proceedings.

ruggedtoast

macaque wrote: »

Some home owners get into financial difficulty and end up losing the house. These are mostly sad and regrettable outcome. If this happens to you however, I hope you will let us know so that I can be there with my deck chair and flask of coffee to enjoy the proceedings.

I agree - what a horrible attitude OP has.

Anyway in response to his question. Legally you can serve 2 months notice to the end of the tenancy. If they dont go and you really do have to kick them out then the process could take up to a year.

clutton_2

""then the process could take up to a year."" - that is simply not true. the length of time after issuing a Section 21 to the day the tenants leave is dependent on how busy the courts are - it can be a few weeks, but at most 2/3 months - providing the paper work is completed accurately