Potentially buying a property with tenant insitu

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  • Vgirly
    started a topic Potentially buying a property with tenant insitu

    Potentially buying a property with tenant insitu

    Viewing a property with a tenant in currently. What paperwork would you want to see before you proceeded with the purchase? I'm presuming contract and proof of rent payment, anything else?

  • DPT57
    replied
    Most conveyancing solicitors wouldnt have a clue about the finer points.

    Leave a comment:


  • MdeB
    replied
    Originally posted by Glover1862 View Post
    All these questions should be asked during conveyancing,
    It is not a conveyancing issue; it is a purchase of business issue.

    Leave a comment:


  • boletus
    replied
    Originally posted by Glover1862 View Post
    All sorts of things during the house buying process could present issues, if you take the attitude that everything is potentially fraudulent then no house sale would ever move forward.
    But buying with a tenant in situ is higher risk and should be priced accordingly.

    All these questions should be asked during conveyancing, a good experienced solicitor will investigate it, if you have been given false information then you’d have grounds to sue.
    How many years of your life will that take, even assuming you are successful?

    Not saying anything wrong with taking a punt, just make sure you go into it with eyes very wide open.

    Leave a comment:


  • Glover1862
    replied
    All these questions should be asked during conveyancing, a good experienced solicitor will investigate it, if you have been given false information then you’d have grounds to sue. All sorts of things during the house buying process could present issues, if you take the attitude that everything is potentially fraudulent then no house sale would ever move forward. All I’m saying to the OP is that it can be fine to buy with existing tenants but investigate it thoroughly and get a decent solicitor who has experience of transferring tenants.

    if the tenancy started before Oct 2015 then the requirement was not there to supply the gas cert before the tenancy stared so cant see how that would prevent a S21 being severed.

    Leave a comment:


  • KTC
    replied
    Glover1862, my response you quoted was to the question posed in the thread in genearlly, not you in particular.

    Originally posted by Glover1862 View Post
    My solicitor requested the tenancy agreement and I have a copy, what more proof would you need?
    Oh I don't know, say if the seller-previous landlord had served the tenant a notice saying the tenancy is no longer shorthold? Or if the tenancy the agreement relates to replaced an earlier non-shorthold assured tenancy?

    Originally posted by Glover1862 View Post
    The deposit is transferred to me and there is a procedure on the dps website to do it.
    Great, but say the deposit was actually protected late, or PI wasn't correctly given. You're now the landlord, guess who the tenant is entitled to sue for the 1x-3x penalty.

    Originally posted by Glover1862 View Post
    The gas safety certificate to be give before the tenancy is something relatively recent 2015 I think, I have all the back gas certs and new ones are with the tenants.
    Failure to give the tenant a copy of the GSC before they occupy leading to no s21 possible is currently belived to be non-rectifiable once tenancy have started.

    Leave a comment:


  • theartfullodger
    replied
    Originally posted by Glover1862 View Post

    My solicitor requested the tenancy agreement and I have a copy, what more proof would you need? ...............
    Ummmnnn you can a shiny new signed AST but if the tenant moved in in 1988 it WILL actually be a "Rent Act" tenancy, and rent actually way lower than AST states.

    Just ask tenant (yes, the human..) when they 1st moved in: Could save a very expensive (£10k+..) mistake...

    Leave a comment:


  • MdeB
    replied
    Originally posted by KTC View Post
    I remain to be convinced that the purchaser inherit liability incurred by the seller for deposit protection non-compliance under tenancies that have ended.
    You are probably right, but if there are deposit protection issues I would seek a reduction in price just in case.

    Leave a comment:


  • MdeB
    replied
    Originally posted by Glover1862 View Post
    Currently if the tenant has a AST then you can evict them, just might take longer if there are issues with the paperwork, that’s my understanding anyway.
    And you need to know if that is likely to be the case so that you can negotiate a discount.

    Failure to serve GSC before tenant occupies after September 2015 removes ability to use S21.

    I would want to know exactly my potential liabilities so that my price paid reflects the risk, not for reasons to pull out of the purchase (but if the price did not compensate for the risk, then I would pull out)

    Leave a comment:


  • Glover1862
    replied
    Originally posted by KTC View Post
    Are you sure that you can demonstrate in the future if necessary
    • that the tenant is on an assured shorthold tenancy,
    • that any deposit paid in regard to the current tenancy is both protected and prescribed information given correctly and on time,
    • that a valid GSC was given to the tenant before the tenant occupied the permise
    ?
    My solicitor requested the tenancy agreement and I have a copy, what more proof would you need? The deposit is transferred to me and there is a procedure on the dps website to do it. The gas safety certificate to be give before the tenancy is something relatively recent 2015 I think, I have all the back gas certs and new ones are with the tenants.

    A decent solicitor should make sure that the transfer is done correctly, ok, they may not but then they could not register the property correctly or 101 other mistakes could be made. Currently if the tenant has a AST then you can evict them, just might take longer if there are issues with the paperwork, that’s my understanding anyway.

    Leave a comment:


  • KTC
    replied
    Originally posted by MdeB View Post
    Proof of move-in date (to determine type of tenancy).
    There are edge cases where that wouldn't be enough.

    Originally posted by MdeB View Post
    Proof of compliance with deposit protection legislation (for all tenancies granted in the last 7 years)
    I remain to be convinced that the purchaser inherit liability incurred by the seller for deposit protection non-compliance under tenancies that have ended.

    Leave a comment:


  • MdeB
    replied
    1. Proof of move-in date (to determine type of tenancy).
    2. Inventory.
    3. Proof of service of required documents
    4. Proof of compliance with deposit protection legislation (for all tenancies granted in the last 7 years)
    5. All tenancy agreements for current tenant
    6. Proof of deposit paid
    7. Proof that everything that could invalidate a S21 notice has been properly addressed.
    8. Visibility of tenant's copies of the above
    9. Right to rent
    10. Proof of rent payments for past 12 months
    11. Proof that all appropriate covenants on the property have been included in the latest tenancy agreement.
    12. Tenant's employment and benefits status.
    13. Guarantor agreement.

    Leave a comment:


  • Danneroo
    replied
    I have both purchased and sold with tenant in situ, both worked well. With the purchase I was receiving rent from day one, I would have had a void period,redecorated and had advertising/reference costs if I'd bought with vacant possession.

    With the sale, I did not have the hassle and guilt of evicting a good long term tenant, I sold the property below market value but did not the long void period or decorating costs.

    Leave a comment:


  • KTC
    replied
    Are you sure that you can demonstrate in the future if necessary
    • that the tenant is on an assured shorthold tenancy,
    • that any deposit paid in regard to the current tenancy is both protected and prescribed information given correctly and on time,
    • that a valid GSC was given to the tenant before the tenant occupied the permise
    ?

    Leave a comment:


  • Glover1862
    replied
    I've purchased before and all was good. In my case the LL was selling up and was on very good terms with the tenant, he told the tenant he'd try to sell in-situ but if no response he's serve him notice. The tenant moved in 2005 and is still there, never missed a payment and just agreed a rent increase. I did check the AST and instructed my solicitor to do the same . The few K the vendor would have got extra would have been cancelled out by the loss of rent for an unknow amount of months, this way he got rent until the last, I got rent 1st day and tenant keeps his home, can work.

    Leave a comment:

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