Buying house with tenants in situ

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    Buying house with tenants in situ

    I am about to exchange on a house which has tenants in it. I want to retain them as its for BTL purpose. So the contract is to exchange with tenants.

    The tenants have been verified. I have asked to Agent to have the tenants sign the tenancy. The current tenancy is on AST which has expired and become a perodic tenancy.

    The deposit is held by the vendor/seller.

    What more can I do to protect my interests?
    Can I ask at point of exchange that the seller transfer the deposit to me?
    I would ideally like the tenants to pay me the first months rent asap. Can I ask them to do this at point of exchange? Or is it being to paranoid?

    please help!!!

    #2
    Why is the deposit held by the vendor/seller? Why is it not in a deposit protection scheme?

    If it is in a scheme, I think you can just change the Landlord's detail - perhaps someone with more knowledge could confirm this??

    If not protected, your solicitor should be arranging for the deposit to be transferred to you - so you can protect it yourself.

    Also, if the tenants paid a month's rent in advance you need to watch out for the (a) rental payment date and (b) sale completion date. If (a) is just before (b) vendor will have your first month's rent in their pocket......

    The tenants will have already paid a month's rent in advance to their current landlord (see above note) and can hardly be expected to do it again, unless the vendor returns it to them!!

    and yes, you are being a bit paranoid. Your solicitor and agent should be dealing with this for you - that is what they are paid for! Welcome to the joys of letting...
    Mrs Jones
    I am not an expert - my posts are my opinion and should not be taken as fact!!

    Comment


      #3
      Just in case your solicitor isn't doing the job correctly, ensure that your contract of purchase has the clause referring to vacant possession on completion replaced by a clause referring to the tenants being in possession and refers to their AST. Ensure that these tenants are indeed on an AST and not something which gives them more rights!
      On the day of completion, said tenants will probably be part way through a rental period. Ensure that in your solicitor's completion statement, the sum you pay for the property is reduced by this fraction of the monthly rental which still remains until the next month's rental is due. Ensure also that the completion statement makes due allowance for the deposit that the previous owner is holding on behalf of the tenant. If this deposit is held in a scheme, then the previous owner must take the necessary action to transfer landlord's interest in this deposit to you on completion. A solicitor's undertaking to ensure that this is done can be accepted for this.
      On completion, either your or the vendor's solicitor should notify the tenant of the change of ownership, who the new landlord is, your address and how rent should in future be paid. You must obtain a copy of the AST which is at present in force - albeit on a statutory periodic basis.
      Once the purchase is completed, you should consider inviting your tenant to sign a new AST in your name as the fixed term in his old one has expired and you can make any rent adjustments that you wish at this time.

      P.P.
      Any information given in this post is based on my personal experience as a landlord, what I have learned from this and other boards and elsewhere. It is not to be relied on. Definitive advice is only available from a Solicitor or other appropriately qualified person.

      Comment


        #4
        Originally posted by P.Pilcher View Post
        On completion, either your or the vendor's solicitor should notify the tenant of the change of ownership, who the new landlord is, your address and how rent should in future be paid. You must obtain a copy of the AST which is at present in force - albeit on a statutory periodic basis.
        Once the purchase is completed, you should consider inviting your tenant to sign a new AST in your name as the fixed term in his old one has expired and you can make any rent adjustments that you wish at this time.
        Best:
        On completion, ensure that your solicitor takes-up from V's solicitor a Letter of Authority (from latter or from V in person) addressed to T.
        That Letter should be served on T (by you or your solicitors), accompanied by Notices to T under:
        a. section 3 of LTA 1985; and
        b. section 48 of LTA 1987.
        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


          #5
          Buying house with tenants

          At present there is a AST in place and the rent is payable on 18th of the month.

          I am completing on a property on 18th Aug.

          So should the payment on 18th Aug be made to the current landlord or me the new landlord?

          When should I give a new Direct Debit/ Standing Order mandate?

          I have already arranged a Gas Safety Check to take place on 13 Aug. Will this be valid for me?

          please help, I am getting panicky! Its my first step on the ladder!

          Comment


            #6
            Consult your solicitor. The completion payment can be adjusted up or down to provide the correct apportionments between V and you.
            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


              #7
              The Gas Safety Certificate will apply to the property and as such will continue to be valid for one year regardless of who owns the property.

              Make sure the vendor hands over the T's deposit and/or protection details as a condition of sale. V. important as you could otherwise be out of pocket and/or exposed to a claim for failure to comply with deposit protection.

              http://www.direct.gov.uk/en/TenancyDeposit/index.htm

              Comment


                #8
                Thanks

                Post completion should I have a new AST signed or let the current one run as a periodic tenancy?

                rgds

                Comment


                  #9
                  Originally posted by kosmicmisfit View Post
                  Post completion should I have a new AST signed or let the current one run as a periodic tenancy?
                  Either! It depends whether:
                  a. you and T are happy with the existing provisions (esp. rent); and
                  b. T is happy to become a bit more exposed (as a statutory periodic tenant) than would be a fixed-term tenant.
                  If you decide/agree to grant a new fixed term, you will need to re-protect the deposit.
                  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


                    #10
                    Think I'd drop round to the tenants (having arranged to beforehand... ) / meet them in pub for introductory drink (you are buying...)

                    Be friendly, relaxed, flexible & helpful.

                    At some point show them the AST copy you were given and see if it the one they think they have......


                    (Stone me I've a suspicious mind...)

                    Cheers!

                    Lodger
                    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
                      Two threads by the same member have been merged here. Please do not start a new thread if you merely wish to continue a previous discussion or report on subsequent developments. It can cause unnecessary confusion (quite apart from losing the connection with facts previously established or legal points previously explained).

                      Comment

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