Tenants buying house have asked me to pay for investigations and repairs

[Wonderifitsme]

Have not sold a house before and have no-one to ask on this.

I moved abroad a couple of years ago and rented my (v nice) house to some nice tenants. They wanted to buy the place and I agreed, at a slightly lower price than the estate agent valuation range for the ease of having a secure sale etc (think valuation range 400-450, agreed 390).

they have had a survey, great, which has come up with an internal leak in the upstairs ensuite, possibly making a damp issue in floor. They have asked me if I am willing to pay for further investigation and for costs of repair.

Gut feeling is that this is not right. Surely costs of further investigations are borne by potential buyers and then you negotiate on price. Since I agreed a price at below 3 estate agents’ estimates I’m loath to renegotiate further. But are my instincts right? Tia

I think it's a fair ask.
The sale price you agreed was without there being a leak.

I think in the normal scenario you would have accepted a higher price with room to negotiate if there was a need. As you haven’t put it on the open market I think you’d be reasonable to say no. Also, considering they have been the tenants I’d think it was very much a sold as seen situation since they’ve essentially had a trial living in the house and may have potentially caused/led to the issues.

They've got a £60k discount. Tell them they can pay for it themselves using that or you'll just sell it on the market.

There is already a substantial reduction of the property price to account for the convenience of selling to a sitting tenant. There is no room for further discount.

They haven’t bought it yet, fix the leak!! Why would you not fix a leak in your house (especially with tenants), it will only get worse and more expensive. If they decide not to buy then you’re stuck with a house with a leak anyway.

So, say you say no, and they say “ok we won’t buy”, you’ll then have to fix it anyway because it’s your house, you’re the landlord, and there’s a leak.

There is no right or wrong. The ‘discounted’ price suited you as much as it did them so I’m not sure it makes a difference. Presumably had you declared a leak to the estate agents when they valued the house they might have valued the house at a lower price.
Having said that if you don’t won’t to pay for further investigations then you don’t have to. It’s really up to you. A leak in a bathroom could be a simple fix or something requiring extensive work. I’d be unhappy as a potential buyer to take that on but it may be worth it for them.

Have you at least had a plumber or leak specialist have a look?

If you weren’t selling it you’d likely go through the insurance to get this kinds of thing sorted - we had similar with a kitchen and it was a big job all covered by insurance. But it’s different as you’re selling it to them for a big discount to save yourself £/aggro so can set the rules imo. Take it or leave it.

I think this approach is usual when selling in the open market. But you are already generous with the price and all these type of details are negotiable.
Just tell them that that is not suitable for you at this sale price and that you will put the house for sale in the open market to max your profits. You will still have to fix the leak, but surely it is not such a huge one, as it took a survey to find it. I doubt it will take £10000-50000 to fix it.
Have you checked how fast is the market in your area?

Didn’t they notice there was a leak considering they’re living there?

Listen... tell them they have a good discount already...
They can progress as it or you'll serve notice, yhey can find somewhere else then you'll put it on the market and they can bid like everyone else. You dont mind.

Separately claim through your home insurance and get it fixed.

They definitely haven't - just because an estate agent gives a price doesnt mean it would actually sell for anything near that, especially in this market. What if these buyers drop out, it goes on the open market for £450k with no interest and within a few months the price has dropped below what the tenants are willing to pay?

They haven't though. Because there is almost zero chance that OP would have achieved £450k in the current market. Quite likely they wouldn't have got an offer above £390 on the open market. They have buyers in the hand - it would make sense to negotiate.

60k discount! They have a bloody cheek. Was the leak not brought to your attention before now?

Yes of course, I will pay. I will need to adjust the price of the property afterwards to reflect the extra cost as I have already given you a massive discount. If they make a fuss, pull out. The next buyer may be happier with less discount and you would have fixed any potential issues.

She wouldn’t be able to sell it for the top of the EA valuation with sitting tenants. I assume the EA valuations were based on no tenants, because that is how she came to the amount to sell to the tenants for. Wouldn’t make sense for her to base their price on what she’d sell for with tenants.

I don’t think your instincts are right because it’s your house that you are renting to them. If they were just ordinary buyers then maybe you would have a point.

You are also benefiting from the house being sold to the tenants, not just them. If you are concerned that you aren’t getting what it’s worth then sell it on the open market.

Depends where you live. In my area things are going for higher than asking.

Don't focus on the valuation estate agents gave, that will not have taken into account sitting tenants or the fact the market is extremely saturated and standing still in some places. Plus they have their own skin in the game so price it with this in mind.

For consideration: I moved into a rental house, my landlord only had the sale finalised a few days before and notified me of the intention to put a new bathroom in. Builder came to put it in, discovered the shower had been leaking into an internal wall for a long time, but had been absorbing into the wall cavity the bathroom on was so the tiles covered it, hadn't produced any obvious signs except a musty smell.
Soon as the wall cavity was opened it did create a leak and then part of the ceiling below had to be replaced too. It was supposed to take 7-10 days and took 3 weeks to fix, all while I had to move out (with a newborn!) and my rent refunded for the duration.
Fortunately for me I had an absolute lovely landlord.

My point is his survey didn't pick up the leak, and it wasn't a small easy fix leak. If I was buying your house and you were interested in fixing it I'd be keen to pull out, it's a buyers market especially as they aren't in a chain.
Right now it's still your house and you need to check your legal responsibilities on this.

Thanks all. Some mixed opinions.
extra info: the leak is not a big one and not visible but thr survey picked up damp in the cupboards so think there is a leak.
the tenants did try to buy the house for a much lower price (310) and it was only after I got three valuations and said it had to go to open market that they agreed the 390 valuation.
In my area houses are going for over asking because of change in schools entry criteria.
Am really torn now - kind of inclined to say it’s ‘as seen’ given the discount, maybe because of the process leading up to this I kind of feel like they are a bit inclined to take the piss

With your update I’m inclined to go back to the ‘sold as seen’ scenario. Or if you decide if it’s just easier to fix it as they’re currently still your tenants then make it clear it’s the fix only and no making good/flooring/tiling repairs.

When a council house is sold, as the process starts with the tenants - no more work is done on the property. Essential maintenance would be done.

send in a maintenance guy to “fix the leak only” and leave the rest to the new owners. That would be what I would do

tell the maintenance guy not under any circumstances to get into conversation about the situation with the tenants.

Or I could agree to pay for the investigation but not the repair?
it’s a bit challenging because am not on the spot to manage any conversations with maintenance guy. Could potentially ask a friend I guess

Well it’s up to you:
they can offer a lower price because of the possible damp

or

you can do the repair and hold the price.

or you can put it on the open market

Personally I think they’re being daft. They’re buying house for a substantial reduction in price. If they can only just afford that, they actually can’t afford the house.

I think your instincts are correct here.