Buying house with Tenants in problems

Muppit_2

We put an offer in on a property a month ago which was accepted and have been trying to get all the documentation involved with buying and selling at the same time. The property we are purchasing currently has tenants in, and we were told that their contract ended and so it would only take a month to get them out. The tenants dont want to leave, but the landlord wanted to sell, we spoke to the estate agent and he was very comforting and said it was all fine.

Now we are trying to set exchange dates but the property we are buying has hit us with a bit of a bombshell. Firstly, that its 2 months notice for the tenants and not 1, and that they only just paid rent at the start of the month (so is it 2 months from the start of next month? effectively 3 months?). Secondly, that they want us to complete on our sale before they will give their tenants the two months notice! (because they dont want our sale to fall through and they loose rental money)

So it seems they want us to sell our place and go rent before asking their tenants to leave - which means we will have to wait a month to complete ours, then rent for 2 months till exchange, and a further few weeks till completion. This is so frustrating, is it unreasonable to ask them to serve notice now? We cant exchange with them until the property is vacant, and they wont issue notice until ours has completed. We should have exchanged contracts on our flat within 3 weeks so its going to be 5 weeks before completion. So we could be renting for 4 months or more if the tenants are difficult.

I would like to just walk away, but its a really nice place and its a good price. Does anyone have advice on how best to proceed? It just sounds like the seller isnt all that interested in selling. What do you guys think?

clutton_2

the crucial thing here is when the tenants last signed a tenancy agreement - this will determine when notice can / cannot be given - ask your solicitor - why is s/he not advising you on all this ?

however, just to make matters even more bleak i'm afraid - even once the two months notice has been given, the tenants do not have to move out if they dont want to. LL will then have to take them to court to request repossesion , IF LL has got all the paperwork correct - the court will order them to leave (often they are given one month to leave occasionally two if they have kids) - but legally they still dont have to leave - LL then has to go back to court to ask for a Bailiffs warrant (it may take a few weeks for the bailiffs to arrive if they are a busy office) and only when bailiffs turn up on the door step do they actually have to leave.

i think they are being utterly un-reasonable to insist you complete on yours before they give notice ....

PasturesNew

Yes, tenants get 2 months' notice from the rent date, so if that has passed already then it would effectively be 3 months. See potential problems listed above by clutton.

If you really want that house there's only one way for you to proceed. But it's a gamble.

Sell your house and move into rented yourself.
Refuse to exchange until the tenants have left. Just in case they get awkward or even damage the property before they leave because they're miffed.

If you do that then your sale is done and dusted. Cash in the bank.
If the nice house falls through then you're in a strong position to find another.

Risk is getting the rental agreement to tie in nicely with buying the new house. Might be hard to find a contract of, say, 3 months... which would then easily extend month on month until you want to move out. Which might mean you have to rent for 6 months and then you have a doubling up where you're paying rent and mortgage on the new house perhaps.

Did you want to sell first... then go out to look for a new house?
Or did you spot the new house ... then put yours on the market?

If you know you don't want to live in your current house any more, then quit the stalling and just get it sold.

iolande

Is it possible to complete the sale contingent on the property being vacant on a particular day? I.e. the tenants have to move out by a set date otherwise the sale is revoked?

I don't know much about property law, but I would assume that there has to be some way around this as you can't be the first people this has happened to. What did your solicitor say?

poppysarah

It all sounds very messy. You could potentially end up homeless and paying a mortgage or with a trashed house.
I've looked at a house recently - only found out it had tenants when we arrived to view it. I'm just not interested in having a second look whilst it's got tenants in, and certainly won't put an offer in until it's empty.

pinkshoes

Tell them you'll complete on your own house sale first, but only if the vendor pays for your rented accomodation until you can complete on the house you're buying. Perhaps he has a spare property if he's a landlord?

Finding a rental property for less than 6 months can be a nightmare. I tried it once before and the only thing I could find was business accomodation let on a weekly basis, and VERY expensive. The cheapest option would be putting your stuff in storage, then getting a cheap £19 travelodge room for 3 months or however long it takes!! I would still insist on the vendor paying for this...

You can exchange contracts, so at least then he has the guarantee that the sale will go through, but he should be the one paying for your accomodation inbetween exchange and completion.

barnaby-bear

clutton wrote: »

the crucial thing here is when the tenants last signed a tenancy agreement - this will determine when notice can / cannot be given - ask your solicitor - why is s/he not advising you on all this ?

however, just to make matters even more bleak i'm afraid - even once the two months notice has been given, the tenants do not have to move out if they dont want to. LL will then have to take them to court to request repossesion , IF LL has got all the paperwork correct - the court will order them to leave (often they are given one month to leave occasionally two if they have kids) - but legally they still dont have to leave - LL then has to go back to court to ask for a Bailiffs warrant (it may take a few weeks for the bailiffs to arrive if they are a busy office) and only when bailiffs turn up on the door step do they actually have to leave.

i think they are being utterly un-reasonable to insist you complete on yours before they give notice ....

This can take months and if they are trying to get council accommodation the council will advise them that they have to be evicted and to stay put (otherwise deemed to be volutarily homeless) if you complete and they are still there it becomes your property and YOUR eviction... nasty. Are you a cash buyer because most mortgage companies will not allow you to complete without vacent possession anyway?

Muppit_2

thanks for the advice guys, you have pretty much confirmed my concerns.

What has been suggested, is to exchange on both flats on the same day but set the completion date 2 months (+ the days until next rental is due) ahead. This gives the landlords his peice of mind in both respects and we wont need to find a place in the short term. This would be on the proviso that

1. If there are any problems with the property we are buying (i.e tenants dont move out by completion date) then we will have to go into rented accomidation because we will have to move out of our flat on the completion date.
2. That a condition be put in the exchange of the flat that we are buying, that if the property is not vacant at the time of completion, that the contract is void.

With a bit of luck, we wont have to pay rental fees, or move somewhere for a short period (2-3 months), which you guys have pointed out could be very tricky.

Ill update you guys on how we get on in negociations, thanks tons!

PasturesNew

Muppit wrote: »

1. If there are any problems with the property we are buying (i.e tenants dont move out by completion date) then we will have to go into rented accomidation because we will have to move out of our flat on the completion date.

The lender might not lend the money to you unless they have moved out. So it might not be an option at all.

The mortgage offer is probably on "vacant possession" only.

Muppit_2

The lender might not lend the money to you unless they have moved out. So it might not be an option at all.

The mortgage offer is probably on "vacant possession" only.

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yes that is true, but isnt that applicable only on completion? Will a mortgage company allow you to exchange contracts, if the contract says vacant on completion, but if not, contract is void?

Then the mortgage company wouldnt have to give us the money because the contract would be void.

Anyone ever done it this way or heard of someone buying in this fashion?

Smi1er

Will your solicitor allow exchange with the tenants in place?

Only because you give the tenants 2 months notice doesn't mean they'll move out. Current owner might have to evict them, and that will take longer than two months!