Buying a tenanted residential property

[itsthomas]

We are buying a residential property to live in
Now that everything is ready for exchange we are told that the tenant has decided not to move out.
The tenancy agreement is already expired two months ago and she has stopped paying rent since.

Now we would like to know what happens if we complete the purchase of the property with the tenant still living in it?
I assume that in order for us to be able to evict the tenant we first need to sign a new tenancy agreement with her and give her a notice after a few months. Is that right?
And what if she rejects signing a new tenancy agreement with us? Can she?
Any advise would be really appreciated.

[ash72]

Don't exchange!!!!, once you complete the T becomes your liability whether or not the T has an agreement with you. If you still want the property, when negotiate a low price for it, and then take on the hassle of evicting the T, make sure you have all the paperwork relating to the tenancy. If in doubt walk away, if you can't evict the T, you basically paid 10,000's for a property you wont be able to live in for a while and a mortgage to pay for.

[SouthernDave]

Don’t buy it! This could be a nightmare! As mentioned above…How do you know you can get the tenant out? Walk away now

[Hudson01]

OMG - Do not sign anything else, they should be out before you buy, you will have a nightmare if you exchange. What has your solicitor said ?

[theartfullodger]

If you complete (entirely legal ) whilst tenant remains -as they are entitled to without court order and bailiffs/hceo - then you become landlord. Even if outside with removal vans, 3 screaming kids and a mentally deranged partner/spouse.

I advise against this.

If did this, but knew I was buying a tenanted student let, all fine since 2016.

[flyingfreehold]

what you could do is exchange contracts with completion deferred subject to the vendor obtaining Vacant Possession within a certain period of time. However a tenant who has nothing to lose is likely to trash the place. On balance give a wide berth. There should be a bit more coming onto the market shortly, these are not great times for non professional landlords ( and nor for the pros either!)

[itsthomas]

@theartfulodger, sorry but I'm not sure if I understand what you wrote:

"If you complete (entirely legal ) whilst tenant remains -as they are entitled to without court order and bailiffs/hceo - then you become landlord. Even if outside with removal vans, 3 screaming kids and a mentally deranged partner/spouse."

Could you please explain in more details?

[DoricPixie]

You assume incorrectly. Selling the property does not end the tenancy. The tenancy continues exactly has it has always done with exactly the same terms except you’re now the landlord.

Im not sure what you mean when you say the tenancy expired 2 months ago. Is that when the fixed term ended? If so the tenancy is now periodic. Did the landlord issue a Section 21 and the date on the notice was 2 months ago? If so a Section 21 doesn’t end a tenancy and the landlord should have applied to the court 2 months ago for a possession order.

You don’t say if you are purchasing with a mortgage. In case you are, residential mortgages require vacant completion at completion.

I agree with the others. Do not exchange. Instruct your solicitor to cease all work until the vendor has regained possession of the property. Be prepared to be in for a long slog and start looking at other properties just in case.

[doobrey]

The point being made is that you can complete the purchase with the tenants in-situ. However, in that scenario they have possession and you don't.

You would have to wait and/or go through due legal process in order to get possession. That could take a long time, could involve a lot of hassle, there could be damage to the property.

If you really want to buy the property you would probably be best off waiting until it is available with vacant possession, whenever that may be. Otherwise, you could walk away as others have advised.

If you did buy with a sitting tenant then you should NOT sign a new agreement with them. That would be a strategic error and would not be in your interests. When you take ownership you step into the shoes of the outgoing landlord. The existing tenancy continues.

[jpkeates]

Don’t go ahead.

On completion, you would automatically become the landlord based on the existing tenancy agreement.
Evicting the tenant would take a great deal of time, money and effort, particularly as you would continually be asked to prove things you couldn’t.

If the seller hasn’t managed to evict the tenant, imagine how much more difficult it would be for you.

I suspect that the landlord doesn’t know what they’re doing or, worse, they do and need an idiot to take care of the mess they’ve created.

I’m quite an experienced landlord and I’d hesitate nowadays to buy a tenanted property if I knew all the details and that it looked like a decent tenant with all the right paperwork available.
I’d run a mile from this.

[Turbine Terry]

Do. Not. Exchange. I cannot believe your solicitor hasn’t warned you not to, if they haven’t they need striking off.

All relevant points have been covered above and that advice is all from very experienced landlords.

Buying a new house to live in is supposed to be an exciting time. If you exchange with the tenant in situ this would very likely turn into an absolute nightmare for you. You have already seen the tenant is a tricky one. It could take you from anywhere between a few months to almost never to be able to evict the tenants. The misery you could/would be in would be immense, seriously.

The best way forward is if the vendor quickly pays the tenant a few thousand to vacate immediately. If you really want the house give them a couple of weeks to arrange that, if they won’t/can’t, then run like mad.

[Rosco2612]

Defo withdraw from purchase!

[gnvqsos]

Same as all others-switch to another house and be patient.By autumn prices will stagnate as FTBs evaporate under inflationary flames.

[Another Fine Mess]

Ask for a price reduction of £1000 a month while you wait.

[theartfullodger]

@theartfulodger, sorry but I'm not sure if I understand what you wrote:

"If you complete (entirely legal ) whilst tenant remains -as they are entitled to without court order and bailiffs/hceo - then you become landlord. Even if outside with removal vans, 3 screaming kids and a mentally deranged partner/spouse."

Could you please explain in more details?

Thank you: Which part of this do you not understand, please??

The tenant does not have to leave until a court grants a court order of eviction, that order expires, then landlord engages bailiffs/hceo and they do eviction. S5(1) of Thatcher's 1988 Housing Act says so - see
https://www.legislation.gov.uk/ukpga/1988/50/section/5

5 Security of tenure.
(1) An assured tenancy cannot be brought to an end by the landlord except by—
(a) obtaining—
(i) an order of the court for possession of the dwelling-house under section 7 or 21, and
(ii) the execution of the order, etc etc....

Execution of the order is bailiffs doing their stuff: Probably 6 months + after a valid s21 or s8 is served: Many, many s21s are invalid..

Selling a property does not end a tenancy nor compel a tenant to leave.

I forget why (anyone with a pointer??) but when the ownership of a tenanted property occurs the new owner becomes the new landlord: They have no rights, other than those of any other landlord, to occupy the property.