Time to exchange?

[goldpendant]

Cash buyers, no chains, how long should we take to get to exchange?!

Challenge is there's a tenant in the property who currently has a 4 month notice period - presumably the vendor would serve notice after we've exchanged? Would we then have to wait to complete 4 months later??

Personally I wouldn't exchange until tenant has left! Notice period and actually leaving are two different things.

Unless you want a tenant.

We 100% do not want the tenant! Agent thinks vendor won't serve the notice until we've exchanged though - if it fell through they've lost their tenant.

Does anyone know what standard practice is? I can see it from both sides!

As a buyer, I would not exchange until the tenant was out. Any sensible solicitor would stop you exchanging before then too in my experience.

Four months is one heck of a long notice period - two months normally or three months due to Covid (the six month period has ended). But anyway, first question: I've been a cash buyer, clean survey seller keen to sell and it's still taken four months to complete!
Second, seller should have already served notice. I've recently sold two tenanted flats and first one I served notice (also end of tenancy agreement) before I marketed it, the second, more compliant tenant I served notice but said he could stay until exchange, but rentals are so scarce he left as soon as he found another property.
I would not exchange on a purchase with tenants in residence - it should be a condition of the contract.

You can't exchange til they've gone as they can't guarantee vacant possession which could drop them in hot water on completion date.

Thanks all this is really helpful. Our solicitor had advised us of this too but has also said we could have a termination clause after exchange if the tenant doesn't leave before completion.

Strange that the agent doesn't seem to think this is common practice. The sale did fall through a few months ago, I wonder if it was to do with the tenant not going??!

They don't have to go if no notice is served (and then they only have to go once the Court orders them to, a long way down the line).

I'd find another property, frankly.

I think you're crazy to even consider this property, if you want to be guaranteed of moving in anytime this year. How on earth could you consider exchanging when there's a tenant in situ? 4 months notice then potentially another 6 months or more of evictions? While you're in a precarious legal position, your money held and no guarantee the house will be vacant. Plus if things get nasty with the tenant you have already exchanged and now the house is a different condition to when you offered, it's a legal and financial nightmare.

The vendor may not want the risk of losing his tenant. But that's the reality of selling a tenanted property. The alternative is for you to take the risk that the tenant won't leave. Your solicitor should rescue you from this.

Notice needs to be served now, and the tenant needs to be out before you exchange.

If the vendor wants to keep the tenant (and rent) to the sale date, they need to sell to another landlord or BTL investor.

Yikes, thanks all this is really good guidance. Looks like we won't be going ahead unless vendor prepared to serve notice. I called the solicitor and that's the approach they've taken with vendor's solicitor so far too, phew.