Newbie about to buy with regulated tenant

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    Newbie about to buy with regulated tenant

    Hi, First post so be gentle.
    I am about to buy a property with a regulated tennant, am aware of most of the pitfalls and lifetime protection low rents etc..
    The tennant is slightly in arrears at present, does he/she remain in arrears if i purchase or do you wipe the slate clean?
    What documentation should i be looking for from the seller?
    The seller is an elderly gent and we have agreed a fair price he just does not want the hassle at his age.
    Thanking you

    #2
    Regulated Tenant

    Can make good investments if you buy at the right price and you are prepared to wait - with little by way of rental return and the risk of repairs in the meantime.
    When you buy a tenanted property you assume the position of the existing landlord so the arrears situtation is completely unchanged.
    Ideally, you should be looking for a written agremeent which sets out rules and obligations for both parties - this is often non-existent with such old tenancies.
    The fact is you can't get any worse than this sort of tenancy so the paperwork -if it's missing - is largely irrelevant.
    However, you should still get your solicitor to check things out very thoroughly in case there are any hidden surprises.
    Valuation is a matter of judgement and varies according to the circumstances - let's face it with this type of investment it's a bit of a gamble. For instance the property will be of more potential value to the buyer than the elderly owner, its value in use (multiple of its present return which is probably very little), market value now and its potential value with vacant possession - taking into account the probable life of the existing tenant and the state (condition) of the property. Comparable and example values of adjacent property. All these factors need to be considered.

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      #3
      Wolfie

      You need to look acrefully at your funding arrangements also - most BTL lenders restrict the type of tenancies that are acceptable to ASTs & corporate/local authority lets. Doesn't mean to say that funding won't be available, but it might not be on the terms you assumed.

      Good luck
      Mevs

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        #4
        Thanks for the replies
        I am paying about 65% of market value, am aware of a few repairs etc,,
        Am looking at it as a long term investement.
        Will see if the current owner has any form of agreement in writing with the tennant.
        Thanks

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          #5
          Just found this old thread.
          "Regulated tenant", if correct, means that the Rent Act 1977 applies. T is virtually irremovable, which tends to reduce the property value a lot unless T is very:
          a. old; or
          b. ill.
          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).

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