Purchase of house with sitting tenant and 6 month rent arrears

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    Purchase of house with sitting tenant and 6 month rent arrears

    We bought a house at auction with a sitting tenant paying 475pcm. Apart from high hidden fees we were also asked to pay rent arrears of 6 month to the seller. It shocked us to find out this was legal as long as it was in fine print. The tenant is now informed about the new ownership. Obviously we are not happy keep this tenant. We did not sign a new tenancy agreement with him. What are our rights? Can a section 8 be claimed if we never signed an agreement?

    #2
    The existing tenancy agreement continues. Tenant does not have agree to any changes other than change of landlord.

    Have you served notices compliant with S48 (or no rent due) and s3 (possible fines, criminal offence)?

    When does tenant say they 1st moved in please?

    Was paperwork ok for serving seq? (Google nearly legal section 21)

    How were & what fees "hidden" please?
    I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

    Comment


      #3
      There are usually no hidden fees with auction purchases, it would be up to the buyer or the pre-auction solicitor to read the documents and make a you aware of all the costs of the purchase.

      Now that you have purchased the property, you need to now take control, which is to end the tenancy with the T, by getting the T to surrender (which is unlikely) or via the courts for possession. Did you have the tenancy agreement as part of the pack, did it also contain the other documents, epc, gas safety etc? It is important to know what type of tenancy it is, if it is an AST if it is still in the fixed term or has it reverted to a periodic, as this will determine which route you take either S21 or S8. Further information is required, I would suggest you speak with an eviction company so that this is dealt with correctly and quickly, so you can move on and re-rent the property.

      Comment


        #4
        Originally posted by Melala View Post
        Apart from high hidden fees we were also asked to pay rent arrears of 6 month to the seller. It shocked us to find out this was legal as long as it was in fine print.
        You're saying you didn't know? How do you not read the terms of the auction before agreeing to pay a house?
        I am not a lawyer, nor am I licensed to provide any regulated advice. None of my posts should be treated as legal or financial advice.

        I do not answer questions through private messages which should be posted publicly on the forum.

        Comment


          #5
          I have to face the consequences of not having checked those important clauses. Thank you for replies. The tenancy AST agreement startet in October 21 and we have now 6 month rent arrears. What is the appropriate section? Since it will be soon more then 6 month is it a section 8? The tenant agreement was not part of the legal pack. It is 6month agreement that needs a 2 month notice for not being continued to the end of the next 6 month. Is this the best way to go about it and what if the tenant does not leave .Also there was a deposit paid to the seller which he did not consider when asking us to pay rent arrears. Electricity certificate was done. Gas certificate is lacking and probably needs to be renewed. We just completed and need to get to the property this weekend to see if the tenant is still there. In case he is no longer in the property when could we change locks?

          Comment


            #6
            ash72,

            Hidden fee in terms of minimum fees that did not show maximum fees. Which would be today red flags

            Comment


              #7
              Originally posted by Melala View Post
              We bought a house at auction with a sitting tenant paying 475pcm. Apart from high hidden fees we were also asked to pay rent arrears of 6 month to the seller. It shocked us to find out this was legal as long as it was in fine print. The tenant is now informed about the new ownership. Obviously we are not happy keep this tenant. We did not sign a new tenancy agreement with him. What are our rights? Can a section 8 be claimed if we never signed an agreement?
              If it is an Assured Shorthold Tenancy in place then a Section 8 notice is a possibility. Do you know when the original tenancy started? Do you have any paperwork giving you details about the tenancy agreement in place (no need for a new agreement to be signed as a tenancy doesn't end just because the landlord changes), gas safety certificates issued (assuming there are gas appliances in the property), EICR, etc?

              How did you inform the tenant about the change of ownership?

              Comment


                #8
                The seller sent a letter to the tenant informing him about new owner. The AST with the seller started in October 21 but I have no information if there was a prior agreement. There is a valid ECP but no gas safety check. Thank you for the reply.

                Comment


                  #9
                  Originally posted by Melala View Post
                  There is a valid ECP but no gas safety check. Thank you for the reply.
                  This is a bit of a mess.

                  If there's no Gas Safety Certificate and one wasn't in place when the tenancy began, it's likely that a section 21 notice isn't ever going to be possible.

                  The lack of information about the deposit is a further problem.

                  If your purchase of the property included an agreement to have cleared the rent arrears, it's unlikely any attempt to use a section 8 notice will have a chance of success until the tenant owes you two month's rent.

                  Without a copy of the tenancy agreement, any legal possession process is going to be very difficult.

                  You need to serve notice to the tenant that you are the new landlord and give them the information necessary for that notice to be valid. Until you do that, the tenant doesn't have to pay rent and, therefore, can't start to accrue arrears.

                  I think that you need to get legal help as soon as possible and should expect a drawn out and extended process, because there are going to be a number of obstacles to your removing this tenant if they don't want to leave.
                  Paying them to go is possibly going to be cheaper.

                  The seller of this property probably can't believe their luck, so I hope this was a massive bargain to offset what's coming up.
                  When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
                  Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

                  Comment


                    #10
                    Understand there is an AST starting October 21. But when did tenant 1st move in ? (What does he say, not what vendor claimed). If early enough, regardless of paperwork, it won't be an AST so no s21
                    was £475 rent surprisingly low?
                    I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

                    Comment


                      #11
                      The reason properties with problems are sold by auction is because there is a good chance that the successful bidder will not have read the small print and all the accompanying documents, or if they have read them, not taken them in. A very important part of conveyancing is due diligence, that is carrying out a full investigation before being committed. It has to be a golden rule of buying at auction that you do not bid without having had a conveyancer look at the documents.

                      Comment


                        #12
                        Thank you all for the useful advise. We try to catch the tenant today will serve the notice regarding the change of ownership. Which also took place from sellers side by letter Yes the seller is very lucky with me being so naive. At this stage I paid market value. Any added costs from now will be a loss . Hopefully we can keep them at minimum. I will send an update.

                        Comment


                          #13
                          I hope it was cheap. If it was easy to get the tenant out the previous owner would have done it and sold it at market rates. As you seem to be out of your depth IIWY I'd engage a specialist and start praying.

                          Bribing him to leave may be your best option but even that may not work if he's living rent free and will be extremely difficult evict.
                          Do you have evidence the deposit was protected? If not you'll be liable not only for the deposit the seller has presumably kept but also potentially a fine of 3xdeposit.
                          Do you have a copy of the tenancy agreement now? Or just the seller's word that it ever existed. Seems unlikely he only moved in 6 months ago given the lie rent.

                          Comment


                            #14
                            Re notice about change of ownership, you'll appreciate there are separate requirements.

                            S48 - AN address for tenants to serve notices on you somewhere in England or Wales (eg the lettings agent).

                            S3 - your actual home address, wherever it is in the world.
                            I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

                            Comment


                              #15
                              Something doesn't sound right, the tenancy started in Oct 21, and we are now in April 22, and there is already 6 months rent arrears, which would mean the arrears started in the first month, and since most Auctions sales take 20 days to complete, and would have been listed a month earlier to get into the auction the seller would have rented out and then sold it within 3 months, Is this an April fool?

                              Comment

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