Buying a tenanted residential property

[theartfullodger]

NB If, after purchase, new owner does not serve relevant notice(s) on tenant (s48 & s3) then no rent due (s48) and possible fines & criminal offence (s3).

[itsthomas]

I know that everyone is warning us not to purchase the property with the tenant still living int it, but our situation is that if we don't complete this purchase we most probably won't be able to buy ever anything else as the interest rates have gone up three times since we got our mortgage offer and our offer will be expired in just 3 months.

We are not the youngest people and this is most probably our last chance to buy a house.
That's why we still consider the option of buying this property even under current circumstances.

Now the question is:
whether we can complete the purchase and continue the eviction process that the current owner hast started or we need to restart the eviction process from the beginning.
Also we'd like to know how long maximum the eviction process could take for a single mother with 3 kids and on benefit.
If it takes maximum up to a year we are happy to go ahead with the purchase and cover the costs.

[Mrs Mug]

Is your mortgage offer for a residential mortgage?
If yes, will your lender allow you to rent out the property?

[jpkeates]

whether we can complete the purchase and continue the eviction process that the current owner hast started or we need to restart the eviction process from the beginning.

You can continue the process that the owner has begun.
But the chances of that concluding as you wish are very remote.
This process makes someone homeless, so (quite rightly) everything is against you.

The seller is going to receive a large amount of money less for selling a tenanted property than selling a vacant property, so, the chances are, their process is going to fail.

Also we'd like to know how long maximum the eviction process could take for a single mother with 3 kids and on benefit.

It could be completely impossible.[/QUOTE]Offer the seller £10k more to move in with vacant possession and watch them back out.

And as per Mrs Mug, your residential lender almost certainly won't allow you to let your property.
They can be surprisingly flexible, but this is a poor risk.

This is a pig in a poke.

[ash72]

You have been provided with the majority of replies as don't do it, the final decision will always be yours, but I would tell you to seek legal advice, whatever your motivation for buying this property. I for one would not do it, but if you think the cost of re-applying for a new mortgage is more than a non paying tenant, who may or may not trash the property is financially worthwhile in pursuing then carry on.

[DoricPixie]

I know that everyone is warning us not to purchase the property with the tenant still living int it, but our situation is that if we don't complete this purchase we most probably won't be able to buy ever anything else as the interest rates have gone up three times since we got our mortgage offer and our offer will be expired in just 3 months.

We are not the youngest people and this is most probably our last chance to buy a house.
That's why we still consider the option of buying this property even under current circumstances.

Now the question is:
whether we can complete the purchase and continue the eviction process that the current owner hast started or we need to restart the eviction process from the beginning.
Also we'd like to know how long maximum the eviction process could take for a single mother with 3 kids and on benefit.
If it takes maximum up to a year we are happy to go ahead with the purchase and cover the costs.

If you’re worried about interest rates rising then clearly you are buying with a mortgage. Your mortgage lender will require the property to be vacant at completion which it won’t be if the tenants are still living there. The vendors solicitor would be crackers to allow his/her client to complete without a vacant property or his/her client will be in breach of contract so it doesn’t really matter if you decide to ignore what everyone here is telling you because at least one of the solicitors involved will not let this sale complete until the tenants are gone.

[Turbine Terry]

I (as I expect many of us do) sympathise with your predicament, it must be stressful and very frustrating. Unless your mortgage lender will allow you to rent out the house you will not be able to complete unless you are using a crooked solicitor.

If your mortgage lender will allow you to rent the house out, then to answer your questions about how long it will take to evict -it depends on several factors and the time frame is as long as a piece of string. When did the tenancy start? Did the current landlord follow correct procedures when setting up the tenancy (e.g. protecting the deposit and giving the tenant information known as ‘Prescribed Information’). If he didn’t (and it is very likely he didn’t as he has seemingly been unable to evict the tenant) then they cannot be evicted using the section 21 eviction route unless you were able to convince the tenant to sign a new tenancy agreement (and very likely they won’t). This means that you would not be able to evict the tenant at all unless they were in fairly serious breach of tenancy terms (like stopped paying rent or were persistently abusive to neighbours) and then you can try and evict using a section 8. If the tenant is in anyway savvy (which you can bet they will be) they will be able resist tripping any of the reasons that will allow you to use a section 8 eviction. Even if they did act up allowing a section 8, in court the judge will quite possibly give them a second chance rather than make them homeless (especially with 3 kids). So you might never be able to evict unless you paid them to leave.

You will need to ask the landlord for all the documents relating to the tenancy so as to be able to see the issues you face. The other problem is that as these documents are coming from the landlord you have to consider they might be forged – is it really the tenants signature on the tenancy agreement for example? I am sure the tenant won’t be helpful in confirming.

You really need to appreciate that the landlord is presumably losing a lot of money selling the house cheaply due to the sitting tenants. If he is accepting a large loss that tells you that it is going to be very very hard to evict the tenants, and that he has failed – if he has failed, how can you expect to do it? I presume (and hope!) you are now being offered the house much more cheaply. How much cheaper are you being offered the house due to the sitting tenant? Whatever the figure is then some, or all of that figure, needs paying to the tenant for them to vacate of their own accord. Either the existing owner should pay that figure to the tenant now or, if you are somehow able to complete (if your lender allows) then (if your lender allows) you should ask for this figure as a cash back amount from the vendor, on completion. This will give you a war chest to pay off the existing tenant assuming you can’t evict them. Before completing you (your solicitor via the vendors solicitor) could try and get agreement with the tenant that they will move out for £x amount. Even doing that is very messy and fraught with potential issues. And it should be the current owner who is paying the tenant to leave before you even exchange.

Around 13 experienced professional landlords have given an opinion above, and many of them will have had tenants who have refused to leave when we have tried to evict them. It is a nightmare for experienced landlords, so even more so for the new landlord. Please heed their advice.

At the moment I am regularly looking at and getting new mortgages, they haven’t gone up that much yet IMO – new mortgage products are coming on to the market daily; search for a good broker online.

[royw]

I'm with everyone else advising you to run for the hills. If you still think you may go ahead I would strongly advise you to take all the paperwork to a specialist eviction company and see what their advice is. If you think you can't afford an increased mortgage rate how are you going to afford months more rent as well as mortgage payments while you wait to evict, eviction costs (if eviction is possible at all) and possibly thousands of pounds worth of damage? If the tenant was easy/possible to evict they would already have gone.

[theartfullodger]

I know that everyone is warning us not to purchase the property with the tenant still living int it, but our situation is that if we don't complete this purchase we most probably won't be able to buy ever anything else as the interest rates have gone up three times since we got our mortgage offer .....

In November 1979 BoE base rate hit 17% under Thatcher's government. My building society was kind by only raising their rates to 15%.....

IMHO rates will continue to rise. Sorry.

What you are proposing would breach your mortgage terms and possibly result in place being repo'd. And ending up on the "Hunter" system red-flagged for future mortgages or any other loan / credit deals (eg mobile 'phone contracts...)

[philrosenberg]

On top of what everyone else said about the tenancy continuing after the purchase, it's important to also remember that at that point *you also become a landlord with all the legal responsibilities of a landlord*. Do you know what those responsibilities are? Have you got the right insurance? Are you in breach of your mortgage terms? Are there stamp duty implications? How will you protect the tenant's deposit? Do the tenants have the legal Right to Rent? Do you know if the previous landlord lived up to their legal responsibilities? Do you know the implications of any of this on the eviction process? (Hint, if the answer is no to any of these then you might not be able to evict simply because you want the property back).

Again as everyone else said, do not exchange with the tenants in-situ.

[philrosenberg]

If it takes maximum up to a year we are happy to go ahead with the purchase and cover the costs.

I am lucky enough to have not yet needed to evict someone from any of my properties. But my understanding is that the longest it can take is forever. If the previous landlord or you fail(ed) to correctly carry out some of your responsibilities, then you cannot evict the tenant on a no fault basis - i.e. just because you want them to leave so you can live in the property.

Instead you can only evict them if they do something wrong. This means that if they keep paying the rent and don't trash the place you may never be able to evict them. There are also potential changes in the law coming in this year to make it harder to evict tenants on a no fault basis and none of us know what they will be.

Your mortgage company could then at some point realise you are violating your residential mortgage terms and repossess the house, selling it at auction, at a huge discount with an unevictable sitting tenant. The discount will almost certainly be so large that it will not pay off the mortgage in full. Your credit rating will then tank and you will be left paying off a large debt without any house to show for it. That credit rating will show up on a rental reference check and you might even struggle to rent anywhere. The end result could be bankruptcy and homelessness.

Now, I'm not an expert as I've never had to go through the process. So a this could be a huge overexaggeration. But you asked for worst case scenario and this would be my fear for worst case. It is why, as a landlord, I would not buy a house with a sitting tenant. I strongly recommend you do not do this.

But you're a grown up, you are welcome to take all the advice here and totally disregard it. It amazes me sometimes how people (and I have been guilty of this too) ask advice but only follow it if it is what they wanted to hear.

Welcome to the world of being a rich, lazy landlord just raking in the cash for zero risk or effort - might not be quite as you imagined?

Good luck, you might need it.

[Lesney Park]

Unless I've missed something, OP is buying with a residential mortgage (they intend to live in it)

Therefore whilst they can exchange (not advisable), they cannot complete as it will be a condition of the mortgage that there is vacant possession, which there clearly isn't while this tenant is in situ.

OP will never become a landlord intentionally or accidentally unless they use a BTL mortgage product as the solicitors will not allow it to proceed.

OP is in for a long wait, but there is no risk to them, beyond time wasted if it was to fall through later, for whatever reason.

[Dreamingofsea]

Lesley Park - I really hope you are right and the OP s solicitor won t allow him to exchange and complete (because of his mortgage conditions) and thus “save himself from himself” because I could not concur more with everyone here 100% he should not buy this property. There are negligent and crooked solicitors around though.

[Lesney Park]

I certainly wouldn't complete, we are in agreement on that. My point was OP can't

Solicitors act jointly for the buyer and lender, so barring any massive negligence, they'd be trashing their professional rep with that lender and opening themselves up to legal action from both the buyer and lender if they allowed it to complete as its contrary to the loan agreement as set out and ostensibly reviewed.

[jpucng62]

I can’t believe you solicitor would allow you to complete without vacant possession and buying it without could cost you tens of
thousands of pounds. You have no idea how difficult it might be to evict the tenants or what it would cost. DON’T DO IT!