Selling our house then renting it back for a few weeks?

[sarahsarahsarah36]

Hi
Has anyone sold their property but negotiated to stay in it and rent it back from their buyer?

We have potential issues with our house chain. Our buyer's mortgage will expire if we don't complete by a certain date, and we're not sure our own vendors will be ready by then, so the whole chain could fall apart.

One option would be to quickly sell to our buyers but stay in our house a while longer til our new purchase is complete. Buyers are OK with this idea as they have another place to stay, but we're worried we'll be vulnerable as essentially 'renters' in our own home - at a vulnerable time as I'll be heavily pregnant, which is also why we don't want to move twice by going into rental accommodation (which sounds expensive and a lot of hassle).

Are there risks to this plan we haven't considered? Has anyone done this?

PS I've namechanged but I've been around for a long while.

Buyers' solicitors aren't usually keen on this - no matter what contract you sign stipulating when you would leave etc, as a tenant (as I understand it) you would acquire statutory rights and, ultimately, the buyer would be a LL and have to go through a formal process to evict you should you refuse to go. In the worst case scenario, if it was found that some of the LL regulations hadn't been abided by - for example, the buyer hadn't got current gas safety certificate - then the court could throw out the whole claim and he could be stuck with you. That is why the vast majority of sales stipulate vacant possession.

I know that you only want to be there for x time but a solicitor's job is to look at the potential problems that it could cause a client.

This gets asked quite often. General consensus is no no no no NO NO NO NO NO NO.

If you rent a house out you need a valid gas safety certificate. You need permission from your mortgage lender to let. You need adequate insurance. Are your buyers going to sort all that? At who's expense? How much will they charge? They will have to pay tax on their property income so need to take that into account.

They won't have actually achieved vacant possession so there are issues with that and potential their mortgage.

Their mortgage may not cover rental meaning they voukf lose the mortgage anyway.

What happens if the chain breaks down after you've sold? You'll be stranded and do will they.

I'm principle it sounds great, in practice it leaves everyone vulnerable.

Most mortgage companies won't agree to this, because of the requirement for vacant possession on completion. So the buyers solicitors cannot agree to it, as they normally act for the buyer's mortgagees too, and have to act in their interests.
This means if you do it, it will have to be a private agreement between you and the buyers, which is not a good idea as so much could go wrong.
What is holding up your vendors? Could they be persuaded to move more quickly?

Ah very interesting, thanks. I'd been focused on how it might be bad for us, but it sounds like the risks are mainly theirs! Not looking too good. Grateful for any further stories and experiences.

We did it but the house we sold was being bought by a landlord to rent out so the situation was a bit different. We were renovating our new house and needed a few months to get the major work done.

we did this for 6 months, but the new buyers were purchasing it as a rental.

We had a similar thing. Turned out the people our buyer was selling to, were planning to keep and rent their existing property - already had a letting agent lined up. They let it to us for a few months so their sales could proceed. Was all within a few miles and they were neighbours so that made it easier. It was a PITA moving twice but 3 months later we are all in our permanent homes!

It depends on the circumstances of your buyers really. If they can get the agreement of their lender it is possible but it's unlikely tbh unless they are buying with a 'buy to let' mortgage. I've been involved in several transactions where this has happened but only where the buyer was going to be letting the property out in any event and were cash buyers.

My concern would be selling the house, renting it back and then the chain one you are buying falling through, that would leave you with nowhere to buy and your buyers wanting you out. Friends of mine in a similar situation found a holiday let locally and rented that for a couple of months with all their stuff in storage. they only had suitcases to worry about rather than a full house move and because kids were back to school and it was such a long let they negotiated a really good deal on price. They said it was like being on holiday while they waited.

I'm afraid your buyers would be mad to let you do this and no decent solicitor would let them. They would need an assured shorthold tenancy agreement which would give you various rights as tenants, not least 8 weeks notice to vacate - and that's if their lender even permits it. If your onward plans were to fall through and you refused to vacate the property then they would have to go to court to get you out.

Would your buyer consider agreeing to a longish gap between exchange and completion?

We live in Europe, so not exactly the same, but we wanted to buy a house where the seller wanted to do this and we said absolutely no way on earth. Because the risk would have been that thingss would change and we wouldn't be able to get them out later. The solution is that you move somewhere else while you wait and if necessary put your stuff n storage. It's more expensive and a pain in the arse, but that's life I'm afraid. Your buyer would be totally stupid to agree to it and probably can't anyway because of their mortgage lender refusing.

What i would do is ( we almost did have to do this so i planned it all)
Sell the house - arrange a container rather than a renoval truck with the moving company.
Pay storage costs for container.
Rent holiday house for the short time you need. No hassle, as no bills to deal with or paperwork to sort out.
Move to new house - container arrives.

This way you don't pay for 2 moves, just the storage in the middle. You have the cost of the holiday house but if you are off peak you can prob negotiate a good discount as they will save on changeovers.

Thanks for the replies. My concern with moving out to a new rental is I'm due to give birth over this period, and I just can't imagine being away from home (current home or new home!) during that upheaval. We may have to just hope our own vendor pulls it off in time!