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

We had this too during our last sale. After the surveyors reports had been completed, there were numerous requests from the buyers for extra viewings to take measurements etc, and each visit was followed by another ‘issue’ they had noticed and an attempt to renegotiate the price. It was happening so often that DH ended up ringing the estate agent and instructing them to tell the buyers we were not facilitating any more viewings and to confirm with them whether they actually wanted the house at the agreed price, because we had no intention of dropping it any further. They stopped. Sometimes you just need to tell it like it is with CF’s like this.

Our house is in the process of being sold, and we have just discovered a rat infestation, damaged main drain and 2 rottn window frames . God knows what the buyers's survey will find, but meanwhile we are getting all that fixed. It's life sometimes.

My impression was that they didn’t even know the leak was there until they had the surveyors report. If they are in the process of buying the house then I would have thought the normal negotiations on price after a survey would apply. If they’ve already had a substantial discount in light of the fact that they are tenants I do think it’s a bit of a cheek to ask for more. If the issue is enough to make them decline to buy then OP can simply have the issue investigated and repaired as the landlord, give them notice and sell on the open market at the full price.

But then say the leak costs £3k to fix. The OP can then put it on at a realistic price

Ideally yes but in this case she has already given a significant discount and given the lived there I would expect they were already aware of the leak.

So the alternative is to pull out of the sale, fox the leak and relist the house on the market for the higher market price.

She can also see if they can meet in the middle because unless the leak would cost more than £60k to fix the buyers will also lose out of they have to pull out and buy another house at market price.

I agree. People always like to boast they live in an area where houses are flying off the shelves. Our small close in a desirable area has sold 4 houses over the last 12 months.

All the sellers were keen to sell so they priced to sell and all bar one took off 5% off the asking price.

Not at all shitty - totally fair

It would be pointless. Throwing away a sure fire sale in a buyers’ market and fixing the leak anyway. There’s no upside. It’s commonly known as cutting off your nose to spite your face.

You haven't given the potential buyers a discount. You have together negotiated a price. They have now re-opened the negotiation, which the rules in England allow. It is now up to you what your reply is - there is no right or wrong answer re: changing the price. Both parties are entitled to negotiate as they see fit.
The only difference that having tenants means is that you are currently their landlord and have a legal duty to maintain the property above and beyond the obligation to fix issues with a house you are selling.

If they carried on renting it would be down to you. But you’ve entered into a new relationship now, they’re seeking to buy, at a considerable discount.

They haven't entered into a new relationship. OP is still their landlord and they are still her tenants. She remains legally responsible for repairs until the tenancy ends.

As a landlord, OP is obliged by law to complete repairs in a reasonable amount of time, and make good. As the issue is damp, there are also extra regulations that must be complied with.

https://www.gov.uk/government/publications/damp-and-mould-understanding-and-addressing-the-health-risks-for-rented-housing-providers

Surely since they are the ones who are living there and the likely causes of the leak then it should be sold ‘as is’?

I personally would not agree to pay for anything more and if they then don’t want to continue with the sale then so be it.

Have you checked how much similar houses in your area are going for ? If they are selling for the price your estate agent quoted I would refuse as they have already being given a big discount. Remind them they have a discount already and if they want to change their minds you can put it on the open market.
But if they are still renting you have a legal obligation to do the repairs , if so you could then increase the sale price of the house to compensate for the repair

How would they have "caused" the leak?
Either way, landlords are obligated to repair leaks and damp. Irrespective of the impending sale.

The significant discount is theoretical. It's a bit of a stretch to assume £60k when the estate agents quoted 400-450, which might already be optimistic.

Anyway, the tenants are presumably still paying rent so are surely entitled to the repair. Since we don't know what's causing the leak we can't assume the tenants have caused it.

If OP isn't happy she can withdraw from the sale.

I disagree with many responses here. In this current market, £390k is not a substantial reduction. Don't forget, the highest valuation is usually from an agent who wants the business and knows the other agents won't value it so high. If you had put it on at the top end of the valuations at £450k, it's unlikely to have sold, and you would have ended up reducing it, so if you reduced it to say the mid-point of £425k, it would likely have ended up selling for £390k anyway. A reasonable offer is between 5% and 10% less than asking price, especially in this current market where its a buyers market and properties are lingering on the market for months and months. The damp issue is yours to deal with as you still own the property, and their request is perfectly reasonable. Who would purchase a house with a leak or damp? It could cause mould issues and they may end up walking away. You could possibly negotiate with them paying 50/50 for the repair. The only piss-taking they did was offering £310k at the beginning but £390k is a reasonable offer.

yes, an internal leak not yet visible is most unlikely to have been caused by tenants. The survey has done you a favour OP. Fix it before serious damage has been caused. If you are regretting accepting the tenants' low offer, that's a separate issue.

And I think there's a change to the law which means you couldn't relet it for 12 months once you've emptied it to sell.

Capital gains should be removed/reduced for people selling to their tenants. That'd ease the pain. Although might this mean you get charged Cap gains tax at the full market value even if you sell for less?

Well it's still your house. So either you get it done or reduce by the amount it costs to do so?

They didn't get a £60K discount - the £450K might have been one of those unrealistic fantasy valuations

When we sold my mother's house after she died - we got an incredible range of valuations - £360K, £375K, £440K - on the open market and without defect it sold at £355K.

I'd put it on the market anyway and look into the leak. Tell them you'll pay for someone to take a look but as there may be incurred costs now you are putting it on the market to get the best possible price.
Even if you get an extra £10k, that would hopefully pay for the potential damage and you won't resent the situation.
Best case scenario you get an extra £25-50k and there is no actual leak!

You think another surveyor won’t spot the leak?

How much that income is going to be? Not 40-50k. While that’s the kind of discount op is offering and by putting it on the market, she can sell it for atleast 30k more, no?

No they don't have a £60k discount at all. Just because the valuation states £400k-£450k doesn't mean they'll get that. It's valued at being worth that cos the owner hasn't declared the problem with the ensuite. At the least they're saving £10k and that's with the undeclared problem. If that was declared it's gonna knock more off the value due to the cost of fixing it. As it is they're still tenants therefore aren't responsible for repairs whilst their landlords still own the place and are taking rent from them to live there.

If they are still tenants, and had complained to the letting agent/you, that leak would need to be investigated and fixed. Or are they on a tenants’ repair lease?

Have I missed something?

I'd say something along the lines of this, tbh. They've been living there for 2 years ... they may have even created the problem!