Seller wants to stay on after exchanging contracts

[asks62]

A bit of a strange one I must say in our journey of finding our first home. We've had a few difficult scenarios thrown at us in the last few months but this one, I must admit is a bit too crazy to digest. Looking for any advice you can offer.

Offer accepted. We're in a rush obviously to beat the Jun 30 stamp duty deadline. (It's a big sum for us if we were to delay).
Few days later the estate agent says the sellers are doing up their new property and it'll take a few more months than planned earlier. So they're still happy to close the transaction by end of June but they will stay over for 3 months beyond the contract completion date.
They're happy to pay rent for the 3 months that they stay at technically what would be our property if we go ahead.

Problems:

1. Solicitor and bank have both red signalled it saying you need to take possession on contract exchange day. So essentially I've to lie to them saying I will be moving in there as soon as the contracts are exchanged. I'm extremely uncomfortable with this.
2. Since we would be owners all liability on the house is ours. Building insurance etc could be invalid if something were to go wrong like a fire, burglary etc.
3. We love the property. It's a nice area but we're too inexperienced to visualise the challenges we might get into because this could be breach of contract with lender etc.

The sellers seem genuine but I know nothing about them.

There are not many properties on the market because everyone seems to be buying one at the moment.
My mind says we should just let it go.

Is this a common scenario? Do you think it's worth the pain?
Estate agent is trying to talk me into it and I'm confused.
Any advice is appreciated.

No there's all sorts of legal implications if they do this. If they can afford to pay you rent, then they can rent somewhere else.

Plus, where would you live?

You don't have to explain anything to your estate agent. Just keep saying that you're solicitor and bank have advised you not to, and you are taking their advice.

Doesn't matter what bullshit argument they come up with. Or any emotional blackmail type argument. Just say NO.

I wouldn't even offer to exchange with a three month gap, that will not advantage you at all, stamp duty is calculated on completion not exchange and it will tie you and your money into a house with no comeback on the sellers if it all falls through. Also what if something happens in those three months - you lose a job, someone dies, the mortgage offer expires. Too much to go wrong. The only thing you might be able to suggest is if your landlord is amenable to sublet your current accommodation (assuming you are renting). Or negotiate a drop in value contingent on completion date. The vendors must know that this is a really cheeky suggestion.

No don't do it! I have experience of several building projects and they never ever get finished on time. Months could drag on and you'd then be a landlord with all the faff and responsibilities that come with that. You'd need a different mortgage and insurance. Buy to let mortgages have higher rates and you wouldn't be able to remortgage that quickly so it would cost you £££ in interest. You need a contract for the rental (extra fees to get that drawn up), you'd be liable to fix anything they break whilst living there (if they trash your carpets/curtains). What if the boiler breaks, then you have to get an emergency plumber into a house you're not living in etc. You'd also need to have an EICR report done as a legal requirement of landlords.

No way I'd do this. There is so much faff involved for you for zero benefit. You'd need them to pay well above market rate for rental to make it a situation where you didn't lose money.

Just say no.They can rent elsewhere for three months if they need to. The EA is only keen as he will get his fee on completion of the deal.He does not care about you at all.

Tell them you are happy to delay completion and ask for the £15k difference or whatever it is by then with the stamp duty situation that you have lost out on. There will be a big cost to them of moving out and renting short term so they might actually go for it. If not pull out. Agree with others too many variables/ risks for you. You would need different mortgage/ insurance and legal agreement etc. All sounds very complicated and building jobs can drag on so could be months and months.

@HerMammy

To add, if they can afford rent, they can rent somewhere else.

Exactly!!

I used to work in an Estate Agent in another role. The estate agents are being appallingly unprofessional, so much so I would report them, is it a chain? There are so many things that could wrong. Do not even consider it!

Don't bend over backwards to find ways to help them out. It's not that they're going to be homeless. They already have a place and are renovating it. They need to either live with the ongoing work or find themselves an alternative.

People who cause this level of stress by being total cheeky fuckers at this stage are probably going to mess you about the whole way through. I'd give them one clear and final statement of your position and if they don't fully agree walk away.

Yes it's a nightmare finding a new place and I know that the stamp duty holds huge sway (I completed myself just a month ago) but they're using your first time buyer situation to take the piss. If an EA is advising you in any way to lie to your bank and solicitor to facilitate this I would be reporting them as well to their professional body.

Try and remember that the estate agent does not work for you, they work for the sellers.

Listen to your solicitor. Your solicitor does work for you.

Do not agree to let them stay on after completion, for all the reasons given.

No way op.
You'll regret the decision if you go ahead with it.

@aretherereally4Hs

It's common to exchange and move a week later (I remember it feeling odd paying house insurance on the house we weren't in and then our buyer insuring our old house) but 3 months sounds ages!!!

That's because (as far as I remember) you exchange contracts and then complete a week or so later. So everyone has time to check the contracts

Your solicitor has given you legal advice. Why are you coming onto a site of legally unqualified people asking for their random opinions?

1. I'm a solicitor, this is fine, the sellers will definitely move out without any arguments and not do any damage to the property, and its fine to lie to the bank, insurance companies etc......

2. Or I'm not a solicitor and am talking out of my arse on the internet, and you should listen to your paid for legal advice...

Which one do you think is most likely?

Fair enough, if you want to bounce ideas off people, but take the advice with a pinch of salt

Nope. We had this suggested by someone for a property a few weeks ago, and our solicitors told us it would be mortgage fraud, and that we’d stand little chance of being able to evict them any time soon if they chose not to go. They only wanted an extra month “or so”.

No, you need gas safety certificates, specialist mortgage and insurance and what if they decide to not move out, then you will need to evict them - are eviction still not happening due to covid?

Absolutely unacceptable for the sellers to not leave the property. You pay them the money for full vacant possession. Your reasons for being unwilling in your OP are all reasonable and are red lines that you must not entertain the possibility of crossing.

The vendors can sort out a short term rental separately. They absolutely cannot turn the house they are selling into a rental property and force you into all the obligations, responsibilities and risks of being a landlord just for their own convenience. No.

Maybe they’re just testing out if you are agreeable to this, but if not, and push comes to shove, they will find something alternative like Airbnb. I guess their way of thinking might be if you don’t ask, you dont get. But it would be a definite no from me.

@tara66

This is not a great shock in France - where it happens from time to time.

But this is not in France (assuming from stamp duty details, op not stating they are not in the UK on a UK centric site)

Do. Not. Even. Think. About. It.

This is an insanely risky solution - that could leave you criminally liable - to a problem that is not yours.

You have a lawyer. They are being paid to give you advice. Listen to it.

When you buy a house there are 2 important dates:

1. exchange of contracts, when a deposit is paid by you and which commits the buyer legally to compensate you if they pull out from the sale before
2. completion, where all remaining funds are paid, you become the legal owner and get the keys to a vacant property.

Stamp duty exemption is only if you get both parts done by 30th June.

What the estate agent is asking is that you complete on the sale but the vendors become your tenants for 3 months.

Your solicitor has told you (as has everyone here) that this is a terrible idea for multiple reasons.

Go back and say we will pay £X00,000 for completion by 26 June or £X00,000 minus stamp duty exemption for completion after that date.

Accept they may decide not to proceed.

Whatever happens don’t agree to solve their accommodation issue - it’s their issue not yours.

Do not do this OP.

We made this mistake and it took us two years and nearly £20k to fix.

Everything was fine until exchange, the seller then said the house she had purchased had a flood and she wasn’t able to move in, she asked us to either wait an unknown amount of time to complete or complete and rent the house back to her for a month while she sorted out a rental.
Our EA was very keen to complete and said he would draw up a 1 month rental contract and it would be completely risk free.

We moved in with our in-laws for the month.

Except at the end of the month she refused to leave, she said her new place needed a lot of work, she needed to stay longer and she had nowhere to go.
We tried to reason with her and she just started ignoring us, we tried to get the EA to sort it out but he basically didn’t care (as he already had his commission)
We spent two months trying to convince her to move out, she made promises then broke them and made a lot of excuses.
In the end we had to rent a house because we couldn’t stay at the in-laws any longer.
The seller was not paying us rent, she just kept saying she would move out “next week, maybe”
After four months of trying to get her to be reasonable we decided to just go to court to get a possession order to force her to leave, but the problem we had was she hadn’t had a section 21, and we couldn’t issue one because she wasn’t a proper tenant.

It took over two years to get her out, two years of paying a mortgage and rent plus all of the court and legal fees.
In the end we had to have her removed by bailiffs and have the locks changed.

We decided to put the house back on the market because it was totally ruined for us.

Any scenario where you have to lie to the bank is a big fat NO

No is a complete sentence.

Their lack of planning or failure of it is not your problem.

I don't really get why people are so against this. Most people don't exchange and complete on the same day so seems very odd that your solicitor is suggesting this. think the contract and specify the completion date and if it is not done on that date there can be a financial penalty to the seller.

We did this.

BUT - and it's a massive but - the person who way buying our house was a buy to let landlord.

We completed our sale at the end of November one year, we couldn't get into our new house in Scotland until the end of January, so agreed to rent for 2 months. That was almost 5 years ago and there wasn't the protection for tenants that there is now. We needed to provide a shitload of paperwork to the new buyer showing that we had signed missives on our house in Scotland, a situation which is legally binding than exchanging contracts in England. And we did leave at the end of the "tenancy".

However this situation is completely different and you have no such guarantees that they will leave, what if the work overruns, what if they just decide not to go?

Say no. Even if it means losing your new home.

No. They need to find a short term rent. This us very common when dates don't line up - we did it for 2 months and I remember doing it as a child too.

Issues as others have pointed out: invalid home insurance, difficulty in evicting if their renovations run over, terms of mortgage broken.

First, consider what's in it for you.
Then list the risks you'll be taking on.

It just doesn't make any sense whatsoever, does it?

Accept the legal advice you're paying for. Withdraw your offer if it comes to it.