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.

Aside from what the other 90 odd replies have wisely said about it being risky, committing fraud by lying to your mortgage provider and invalidating your insurance... I'm assuming you have no idea what level of renovation they're talking about but 3 months sounds significant. My SiL and family moved into my in-law's house for what they said was 6-8 weeks worth of renovation on their new house they'd just completed on. They ended up staying there 6.5 months due to additional works that were uncovered and then building delays, it nearly cost her the relationship with her parents as they got so thoroughly pissed off at having expected to have them stay for 6 weeks. Do not put yourself in this position!!

It's a little tricky though as you haven't replied to anyone to confirm whether you've got a little bit confused between exchange and completion (although for what it's worth I wouldn't personally agree to 3 months between exchange and completion either for the reason above!) As many have said, because it's true! - if they really want the sale to go through and have offered you rent then they can go through the hassle of finding a short term rental and paying that rent to someone else, it's really not your problem to have to navigate and would be asking you to commit fraud to do so.

@Belladonna12

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.

I don't think you've read the OP properly. They're not suggesting a delay between exchange and completion, they want to stay on after completion.

You need to be really clear whether you are talking about exchange (per title) or completion (per post).

The answer is entirely different depending on the question.

Absolutely not! They can rent for 3 months elsewhere. Do not agree to this!

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.

Because I think the OP has mis-titled the thread. She isn't in fact talking about them staying on after exchange but completion. So the OP would be the legal owner and her mortgage company would have released the full funds but she would, in effect, be the landlord to the sellers for some months.

Her mortgage approval is not on a buy to let basis and therefore she would have to lie to them in order to allow this to go ahead. It's dishonest and foolish and for what? To appease a seller who doesn't want to live with mess or renovations or CBA going into rental to allow the OP to move into the house they've just sold her.

Yes there is a difference between exchaning and then delaying completion (which could be done here) the problem is that wouldnt solve the stamp duty issue which is paid on completion.

So you need to get from the Estate Agents exactly what the proposal is in terms of completion and exchange and work it from there. But ultimately you need to follow the advice of your solicitor and your bank and if they (correctly) advise you not too you say no.

Remember your sellers want to take advantage of the stamp duty holiday as well they are chancing their arm. The far better solution would be for both of you to complete before the deadline and they rent somewhere else.

Indeed I think you need to come back to the estate agent and say no if they are not willing to exchange and completion and moved out by the end of June deadline you have to move on

Why would they rent from you though? Exchange contracts and give a later date for completion (check the mortgage offer doesn't expire though). If it's not done by then they will be liable for all your costs etc and they will be paying a mortgage on two properties in the meantime which will concentrate their minds.

@asks62, you are paying your solicitor for their professional, legal expertise so I would listen to what they are saying, before you get into a situation which will cause you problems down the line. Please see @ElementalIllusions's post as an example of what can go wrong.

As someone else said, if your sellers can afford to rent whilst renovating their new home they can rent elsewhere, and not in what will be your new home. Their renovations in their new home is neither your responsibility nor your problem.

As for the Estate Agent: they are only looking to their sales target and commission. They have no loyalty to you.

Back away from the sale if necessary rather than letting yourself be railroaded into something which may well majorly disadvantage you. 🌹

@Iamtooknackeredtorun

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.

Because I think the OP has mis-titled the thread. She isn't in fact talking about them staying on after exchange but completion. So the OP would be the legal owner and her mortgage company would have released the full funds but she would, in effect, be the landlord to the sellers for some months.

Her mortgage approval is not on a buy to let basis and therefore she would have to lie to them in order to allow this to go ahead. It's dishonest and foolish and for what? To appease a seller who doesn't want to live with mess or renovations or CBA going into rental to allow the OP to move into the house they've just sold her.

Ah, I agree that she shouldn't let them stay after completion. They should extend the gap between exchange and completion or the seller can rent somewhere else.

As other posters have said this is common in other countries - and quite sensible - but not here unfortunately!
Perhaps your sellers don't realise it is not done in the UK.
I'd say don't do it and the sellers can live in a caravan in the garden of their new place while remodelling - or rent something else.

God no!

This is a major no, it’s something to do with breaking the term they live there, to give you rights to evict, if they do not leave.

You cannot lie and let them stay, if they do not leave you are totally fucked. Listen to thr bank and solicitor, they are not being difficult they are protecting you. Do not be stupid, ignore it and let them

You either

Walk away
Tell them to be out by completion and rent some place
Delay completion but they owe you the stamp duty on top of the purchase price at the time of completion.

@Belladonna12

Why would they rent from you though? Exchange contracts and give a later date for completion (check the mortgage offer doesn't expire though). If it's not done by then they will be liable for all your costs etc and they will be paying a mortgage on two properties in the meantime which will concentrate their minds.

They all "need" to complete on the earlier date because of the stamp duty exemption.

OP, I wouldn't set too much store by that. I suspect prices are artificially high at present and you'll be able to buy cheaper anyway once the exemption comes to an end - this is what has happened in the past when there's been a tax benefit deadline.

Don’t do it. Listen to your solicitor, not EA. I personally would consider to pull out and find another house.

No - and as they've already revealed their intentions, I wouldn't trust them to move into another rental property. Some say they will but most change their mind and end up holding up the sale for months instead.

Of course the estate agent is trying to talk you into it. They want the sale at all costs because they want the commission. They don’t care about what happens to you afterwards.

Your sellers are cheeky fuckers OP and they’re trying it on. Say no. They won’t pull out, they are extremely unlikely to find another buyer that would agree to this.

No. They can pitch a tent in their new garden.
Cheeky buggers.

They all "need" to complete on the earlier date because of the stamp duty exemption.

Yes, but the seller can drop their price or pay the stamp duty if they don't complete on time.

Are they proposing a delay between exchange and completion or do they propose to complete and then stay. The former is not a issue if the proposed completion date is acceptable to you as you won’t own the house yet anyway. If they are planning to stay post completion, it’s virtually imposing to evict anyone at the moment if they fail to leave when the time comes. You can’t start the process for 6 months and the courts are so log jammed you won’t get a hearing for 12-18 months which would be a nightmare.

As other posters have said this is common in other countries - and quite sensible - but not here unfortunately!

Genuinely interesting you should say that because it doesn't sound at all sensible to me and so I wonder what the benefit is to the buyer. Where else do you pay all the money for something up front but can't have the enjoyment of ownership for some months afterwards?

Unless you mean a delay between exchange and completion but with the same legal obligations to see it through.

@Belladonna12

They all "need" to complete on the earlier date because of the stamp duty exemption.

Yes, but the seller can drop their price or pay the stamp duty if they don't complete on time.

Of course they can but they don't want to, hence this ridiculous proposal

No

OMG, no, no, no, no! In no way normal or reasonable. Listen to your solicitor, who is acting for you and not the estate agent or seller, who are not.

You don't need to lie to them. You just say no. No - as in it's not up for discussion. No - as in I've said that once and I'm not saying it again.
No - as in that's your problem, not mine. You do not have to be a people pleaser to an estate agent!

It would be absolute insanity, and potentially financially ruinous for you, to allow this.

Your bank and solicitor have both told you no, so don’t do it. You would be breaking contractual terms and conditions.

You owe the sellers nothing. They can rent elsewhere. Estate agents will promise you the moon on a stick if they see their commission slipping away. The sellers and EA are screwing you over because they sense your naivety.

Either you take vacant possession at the point of completion, or you pull out of the transaction completely and buy elsewhere.