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.

Gosh, this has gone viral hasn't it. :)
Just managed a 15 minute coffee break from my work but have not gone back for the last 40 minutes reading through the replies.

Ok, the message is loud & clear. Its an absolutely loud NO.
This is something that I had in my head too & I was just trying to see if I am off track or if it was a common occurrence. As I mentioned we're FTB & that's why the silliness from me.

Some other posters have asked if I am confused between exchange & completion. No I am not, but yes I did title the thread wrong.
Sorry
The sellers want to stay on after completion

My mind is crystal clear now. No confusion & thank you lovely people!
Today will not end sad for sure!
The search continues..

NO!
Then them to shag off and go sort themselves out.
You are guaranteed to be the losing party if you let them carry out this quite frankly cuntish move.
Cheeky fuckers.

@ElementalIllusions. That’s terrible - I’m so sorry that happened to you- I can see why you didn’t want to live there after all that. OP listen to this story please don’t do it.

No no no no and a thousand times no!

I worked in Estate Agency for years (not now) and I don't know ANY who would recommend that this is a good idea. It's not, it will be an absolute fucking nightmare.

They need to do what everyone else does and either live in the house and renovate at the same time or find a short term rental.

@asks62 I know you've already got the answers you need to go forward with this. But just so you've got the clarity in case the EA starts trying to bamboozle...

Once the house completes it is yours (in theory) but in reality it belongs to the mortgage company until you've finished paying the mortgage. Your mortgage company have, probably, got a clause in your mortgage offer that says it will be YOUR primary home. In other words you have to have their permission to let it out, at which point they'll change it to a buy to let mortgage which is a bit more expensive as they take more risk (damage to the property, tenants not leaving if you foreclose on the mortgage etc).

So firstly you'll be breaking the mortgage loan agreement.

Secondly, it is hard enough to evict tenants if they decide to mess about. If tenants decide to stay it can takes months of legal wrangling and court cases just to get their backsides off your property. Which is bad enough if, say, you were renting out your old flat and living in this place. But if someone is squatting in your home...

Tell the estate agents you are not prepared to do it. If everything is not going to be completed in time talk to your solicitors about a reduction in the price so you can finish the work yourselves.

But on completion day not a stick of your furniture, not even a toe of your foot goes into that house until all the money has been paid over as it's not your home until it's paid for.

Similarly, everything item belonging to the seller - including themselves - is moved out ready for hand over of keys when the cash comes through. Only if your mortgage loan is delayed or something happens that means you can't meet the amount of cash due, can they come back into that house.

And ignore the EA. They're being paid by the seller and their loyalty is to the seller. Trust your solicitor - they're being paid by you.

No. What happens if they decide to stay on even longer? Tell them they will have to move out and rent something while they wait for their new property. CFs!

No wonder everyone hates estate agents - such bad advice. They are CFs only interested in their commission.

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

Op don’t listen to this, it’s the riskiest advice ever. This is an unprecedented situation due to the global pandemic and it looks like there is a huge amount of pent up demand, it is equally as likely prices will rocket.

Definitely do not do this.
An estate agent suggested something similar to my elderly mother. She said no, I'm sorry, it is too risky. He said, I had to suggest it but yes, that is the right answer Mrs X.
Good luck with your house move and good that you are wary. It will turn out well in the end.

(And she did still get the house and is very happy there 10 years later)

I'm with the nos. But just for info we had a related situation about 35 years ago. We were selling a house in an isolated area and had already moved out to the other end of the country. After exchange the buyers stated doing DIY work on the house (they got the keys from the estate agent). We found out and talked to our solicitor - obviously - who told us that there was a standard clause in the contract which set a level of rent that they were liable for.

Things may have changed, and this was them moving in before completion, not us failing to move out after completion, but it may be relevant.

I actually think it’s morally corrupt of the agent to suggest this. I know they are acting on behalf of the seller and don’t give a shit about the op, snd just want their commission but the risk of this could be life changing for the op.

The sellers are shits also, they just want to save money on double removals and rental and are willing to screw the op to get it.

All in the other side has acted in very bad faith here.

The estate agent is trying to get you to breach the terms of your mortgage, OP. I’d report them to the property ombudsman.

Say no.

And report the estate agent

God No! They can find somewhere to rent while they complete their works on their other house. It's not your issue if their works have overrun. Do not let the estate agent talk you into this.

well done, OP - glad you navigated through the blizzard.

what used to happen in the Uk, and what may still happen in America, are utterly irrelevant. Some American states have eviction laws where a tenant needs to be out in two weeks or a man with a gun turns up. The UK government have overridden all tenancy agreements with the eviction ban, which means that paying rent is now purely optional. Your agent's idea was insane even pre-pandemic and is now horrendous bad practice.

@DelphiniumBlue

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

Also, you seem to be mixing up terminology, and I hope you do understand the difference between exchange of contracts, which is when you pay the deposit and agree a date for completion, and completion itself, which is when you pay over the balance. of the money in return of vacant possession of the house.
It is a condition of any mortgage that you get vacant possession, and there are also insurance issues, as katmarie* explained.
Don't ignore legal advice which is designed to protect your interests.

I had been going to say exactly this!

@YippieKayakOtherBuckets

The estate agent is trying to get you to breach the terms of your mortgage, OP. I’d report them to the property ombudsman.

I suspect the agent would say they were passing on the request of the seller snd it’s the ops job to liaise with her mortgage provider to get a different mortgage, and not their role to advise on the implications of accepting, that’s the solicitor and the mortgage provider.

I doubt reporting them would be any good, but as said, I think this is morally corrupt to make the request of a ftb, because many of them wouldn’t have a clue of the significance of the request.

Are you talking about exchange of contracts or completion? Your post isn’t clear.

A 3 month delay between exchange of contracts and completion is fine (if annoying for you)

3 months after the date of completion before moving in is definitely not fine.

It’s quite an important distinction for people to be able to advise you.

No and no. Its a minefield and you will stand to lose out in so many ways. They are piss takers. Why can't they move in and do it up in situ like normal people.

I'd say a firm no.

They can go into another rented property if they like but you're first time buyers and therefore in a good position to buy elsewhere and complete in time. I mean it's a threat but they have more to lose than you

They're not going to risk losing you as buyers as presumably they have their own stamp duty to worry about

@DelphiniumBlue

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

Also, you seem to be mixing up terminology, and I hope you do understand the difference between exchange of contracts, which is when you pay the deposit and agree a date for completion, and completion itself, which is when you pay over the balance. of the money in return of vacant possession of the house.
It is a condition of any mortgage that you get vacant possession, and there are also insurance issues, as katmarie* explained.
Don't ignore legal advice which is designed to protect your interests.

this is the advice to follow, (unless you want to be homeless, of course).

@asks62 it sounds like you are intending to abandon the purchase? That’s not necessarily required - the seller has other options and may still prefer to proceed with you as a buyer despite the fact you refuse to meet their (batshit) request.

Just put your foot down, say no but that you are still happy to proceed on the basis of either:
A) completion with vacant possession before end June
B) an extended completion date but with a lower purchase price reflecting stamp duty / your costs.

Report the estate agent