Vendor may have to be reluctant landlord

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    Vendor may have to be reluctant landlord

    A couple say they want to buy our house and have made a verbal offer. They have just put their (cheaper) house on the market and have said they would like to move in to our house ASAP as it is just what they have been looking for and don't want to lose it. Because of the urgency they have come up with a novel suggestion- Could they pay us a very large deposit, (don't know how much, but they have inherited some money) and then rent our house until they have sold theirs and then pay the balance?

    Has any one ever heard of this arrangement before and what are the implications? What if they decide after a few months that they no longer like the house or their circumstances change and don't want to buy it anymore? What if they fail to sell their previous property at all? Could they not get a bridging loan or rent out their present house themselves as we would much prefer to receive all of the money but in the present market this may be the best offer that comes along. What if another buyer offers to buy our house and can pay the whole amount while the first couple are renting it?

    Any advice would be greatly appreciated as we have said we would give them an answer soon. TIA

    #2
    Better: exchange contracts and make them pay 10% deposit. Set long completion date (e.g. one year) but add contract clause allowing them to serve two weeks' Notice fixing earlier date). During period of occupation, they will pay licence fee- NOT "rent"- under Standard Conditions of Sale [ed. 4] clause 5.2. The rate is Barclays Bank plc base rate + 4 percentage points, on the as-yet-unpaid 90% of the purchase price.
    JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
    1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
    2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
    3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
    4. *- Contact info: click on my name (blue-highlight link).

    Comment


      #3
      Thanks so much for your quick answer Jeffrey. You really "know your stuff" as they say and your suggestion may be workable. My only concern is that we do really need to sell our existing house and raise as much as possible as we want to purchase a property/live abroad and would rather sever all financial connections with the UK. Could they be "made" to buy our house once they have contracted to do so? If we agree to your suggestion are we opening up a legal and tax mine field? TIA

      Comment


        #4
        I forgot to ask:- who would be responsible for the bills, maintenance, etc, of our house if they were living in it as licencees? Once the selling price had been agreed at the outset, would they be bound to pay it? What if house prices fell a lot more over the next 12 months, surely they could live in it for several months, serve their notice and then offer us a much lower price as they would be aware of exactly the interest shown in the property by third parties and our personal circumstances.

        Comment


          #5
          Originally posted by jenny36 View Post
          Could they be "made" to buy our house once they have contracted to do so?
          Yes. The contract, once exchanged, will be legally binding and therefore enforceable by you (no matter where you then are).
          JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
          1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
          2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
          3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
          4. *- Contact info: click on my name (blue-highlight link).

          Comment


            #6
            Originally posted by jenny36 View Post
            Who would be responsible for the bills, maintenance, etc, of our house if they were living in it as licencees? Once the selling price had been agreed at the outset, would they be bound to pay it? What if house prices fell a lot more over the next 12 months, surely they could live in it for several months, serve their notice and then offer us a much lower price.
            1. They (P) would be responsible for outgoings from exchange of contracts. Standard Conditions so demand.
            2. As already posted, the contract will be binding and enforceable.
            3. So- P cannot then "offer...a much lower price". The figure in the contract is what counts, irrespective of market prices rising or falling.
            JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
            1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
            2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
            3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
            4. *- Contact info: click on my name (blue-highlight link).

            Comment

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