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Is it unwise to place an offer on a tenanted property?

53 replies

whichwayfornow · 26/08/2021 10:03

I wonder if anyone has been in this position and whether it is generally considered unwise.
We are in a bit of a difficult situation where we need to move out of our accommodation soon. There aren't many suitable properties for us to buy on the market at present but we have a few viewings lined up. A couple of the houses currently have tenants in situ. Both have apparently been given official notice. If we really like one of these properties, how should we proceed? Would it be reasonable to place an offer but not progress further until the tenants have actually moved out? Is it generally unwise? The agents have described the tenants as 'good tenants' but obviously they would need to find a home and there isn't much available at present.

OP posts:
ClaudiaWankleman · 26/08/2021 10:14

I don't think it's unwise to make an offer, but you have to accept that it could all go very wrong. You shouldn't exchange or complete with the tenants in situ - ever . If the property is the one you want though, it's worth accepting the situation.

Has the owner given an indication of when the tenant is currently due to move out?

maxelly · 26/08/2021 10:14

It depends what you mean by 'progressing' really, the trouble is if you don't want to commit any money in terms of solicitors fees, mortgage applications etc until the property is vacant, but you also need to move soon, you are only adding to the timescale. A realistic estimate for searches, conveyancing, mortgage application and surveys is 12 weeks (sometimes can be quicker but don't count on it). It could take 6 months to evict the tenants, so if you don't start the other stuff until they're out that's 9 months, do you have that much time? Certainly I would recommend not exchanging contracts until the tenants are out but to get to that point you will need to have spend a fair amount of money which I guess will be 'at risk' but that is really the case with any purchase as the vendor can pull out of the sale pre-exchange for any number of reasons.

So yes I guess I wouldn't go so far as to say unwise to buy a previously tenanted house if it's otherwise a good buy, but you need to be realistic about the longer timescale and potential complications, which if you are in a big rush could be a real problem for you?

StylishMummy · 26/08/2021 10:16

You're fine to offer on a property with tenants but you can't exchange until the house is vacant. Speak to the seller directly if possible or the agent and find out exact timescales and if the tenants are willing to leave. If they're likely to kick off a stink at being asked to leave, then I'd walk away personally, as it can take months and months to get rid of problem tenants who don't want to leave

readytosell · 26/08/2021 12:24

Agree with the above, proceed with caution. They have been given official notice you say but what does that mean? Are they 1 month into a 6 month contract or on a rolling contract? Are they likely to provide access for things like surveys (which they don't have to do during their tenancy)?

SprayedWithDettol · 26/08/2021 12:26

You might have mortgage issues if the tenants are still resident.

ShingleBeach · 26/08/2021 12:48

If the tenants have exchanged on a property they are buying, and you can see they are packing (as happened in one house I offered on) fine! You can’t exchange until the house is vacant but you have good evidence that it will be.

Tenants with long notice, kids in a local school and a dog that will make it hard to get another rental… potential for a long wait.

I think it is greedy of landlords to market tenanted properties. Fairer to buyers to wait until it is empty.

Chicchicchicchiclana · 26/08/2021 13:30

I don't think you will be able to buy anywhere, tenanted or not, to move into if you have to leave your current home "soon". I think the average for property transactions is at least 3 months at the moment.

VetInAVat · 26/08/2021 13:33

I'm a tenant and have been told that only a court can evict a tenant, even after a section 21 notice to quit. The courts are in a massive backlog. Could take up to 18 months...

CloseYourEyesAndSee · 26/08/2021 13:35

You shouldn't spend any money on buying a property with tenants in. You could wait, but you might not be moving anywhere soon if they don't leave when the s21 notice expires.

Spaceman1 · 26/08/2021 13:37

I would exchange subject to vacant possession being provided on the date of completion. Arrange an inspection on the completion date before you transfer the completion monies. This way the onus is on the seller to deal with the tenant.

BrilloPaddy · 26/08/2021 13:39

It's not worth the risk - a family friend is going through hell at the moment trying to get a non paying tenant out. 13 months to date and still no sign of a court date.

TheGallopingGourmet · 26/08/2021 13:40

Tenants may be on a six month notice period ( due to Covid) and may not leave he property at the end of the notice period. The landlord will then need to go to court to gain possession. Could take months. There is nothing the Landlord can do and Tenants know it.

Rozziie · 26/08/2021 14:01

I'm in exactly this situation. Have avoided tenanted properties all along due to these concerns but the issue was I was just not finding anywhere with all the criteria I had in place with my low (for london) budget, so something had to give.

I have to say I am very concerned. Apparently the guy has been offered money to go and he's 'happy' to go, but who's to say he just won't decide not to? I've got a nice rented flat and not desperate to move but also not thrilled about spending £1500 on a survey and searches just to find that the guy is refusing to move out.

ShingleBeach · 26/08/2021 14:06

@Spaceman1

I would exchange subject to vacant possession being provided on the date of completion. Arrange an inspection on the completion date before you transfer the completion monies. This way the onus is on the seller to deal with the tenant.
Unless you are a landlord buying a rental with tenants in situ / cash buyer, Completion is always subject to vacant possession. Standard.
ItsSnowJokes · 26/08/2021 14:10

@Spaceman1

I would exchange subject to vacant possession being provided on the date of completion. Arrange an inspection on the completion date before you transfer the completion monies. This way the onus is on the seller to deal with the tenant.
Never ever exchange on a tenanted property without the tenants having already left. Do not listen to this advice. You will find yourself in a world of trouble if they don't leave.
CloseYourEyesAndSee · 26/08/2021 14:17

@Spaceman1

I would exchange subject to vacant possession being provided on the date of completion. Arrange an inspection on the completion date before you transfer the completion monies. This way the onus is on the seller to deal with the tenant.
That's impossible though. If the tenants don't leave the landlord can't make them.
lawofdistraction · 26/08/2021 14:27

I just wanted to add that "good tenants" potentially means nothing in this situation.

An estate agent would describe us as good tenants - we've been in our house for years, keep it immaculate, rent always on time. If our LL decided to sell we would do our best to find somewhere within the notice period, but ultimately we know our rights and if we had to stay longer, we would. We're trying to buy right now so wouldn't want to take on a new tenancy contract and that could delay.

All that said, we did actually take the chance ourselves and offer on a tenanted property recently (we lost out to a cash buyer.) They had been already served their 4 months notice. We knew it was a risk but there's so little coming on that's suitable.

CloseYourEyesAndSee · 26/08/2021 14:30

I was a 'good tenant' - paid rent on time every month for 11 years but when I was served notice I didn't leave until I had completed on my own property. As it was I only stayed one month after the s21 notice expired and the landlord was absolutely fine with that but even 'good tenants' won't make themselves homeless for the convenience of a landlord.

WTFisNext · 26/08/2021 14:36

Worth remembering that not all tenants are out to 'get' their landlord. We were issued with a section 21 on 6 month notice because the landlord wanted to sell. We immediately started looking for property, a mixture of our budget and family needs meant that any suitable property was being snapped up before it hit market properly. The rental market is bonkers here.

We actually got to the magic 56 days point when the council considered us at risk of homelessness and were warned that leaving voluntarily before a formal eviction notice was served by the courts (not the section 21) would mean they wouldn't help.

Then the council housing person identified that our landlord hadn't registered as a landlord (legal requirement in Wales) so our section 21 was null and void. Our 6 month clock was reset once the landlord sorted the paperwork and re-issued the section 21 legally.

This meant despite our best efforts we didn't move out until almost 10 months after originally notified because we finally found somewhere that we could actually apply for (kept losing out on shortlisting because we had children...on 3 bed properties!) which we thankfully got.

If we'd reached the second end of notice date without property we would have continued paying rent but with no alternative to move to we would have have to have stayed put because we have children to consider. I'm utterly grateful it didn't reach that point but I know we really messed up the landlords plans because they lost out on two buyers with the time it took for us to find somewhere new.

If there's a way of establishing the tenants circumstances it may be worth proceeding, but if they have more to consider than just a roof over their own head then be prepared for someone who is strapped down and hoping for the best so their family isn't made homeless.

The landlord is basically trying to sell with no tenancy void, don't make that your problem.

Nsky · 26/08/2021 14:38

I bought here with tenants, had to pay despoist of £2,000 and relying on them going 3 months later which they did.
Due to cash sale I wish I didn’t have to wait

DespairingHomeowner · 26/08/2021 15:09

I bought a tenanted property and all was fine/,smooth, however, with the current situation I would probably wait to spend for survey etc until they had moved (or at least seen proof of a new rental contract etc). With Covid tenants know they don't have to move out

Your solicitor will not allow you to exchange on an occupied tenanted property due to all the potential issues

In your situation I would offer but keep looking

maofteens · 26/08/2021 15:10

Normally I think most tenants will leave, but it's hard to find a place in some areas currently. I have recently sold two properties that were tenanted, hardly greedy @ShingleBeach as I rely on the rent for income, and was very happy for tenant to dictate when or if viewings could take place. One tenant left almost immediately as soon as he found somewhere new, the other tenant (who only paid first months rent so got away with living there five months rent free), also moved out before exchange, though I had anticipated issues as he was an awful tenant.
It's a risk, so I'd probably avoid it if you are on a definite timescale.

Rozziie · 26/08/2021 15:23

@CloseYourEyesAndSee

I was a 'good tenant' - paid rent on time every month for 11 years but when I was served notice I didn't leave until I had completed on my own property. As it was I only stayed one month after the s21 notice expired and the landlord was absolutely fine with that but even 'good tenants' won't make themselves homeless for the convenience of a landlord.
See, it would never occur to me to do that. I'd consider it my own problem to sort out and would rent an Airbnb for the month or stay with a friend or something.
lawofdistraction · 26/08/2021 15:33

it would never occur to me to do that

It would genuinely never occur to you that you can stay in your home until you've found somewhere else to live?!
I suppose just casually moving into an Airbnb or with a friend might be an option if you're coming from a furnished property with few possessions and don't have any children. Back in the real world...

maxelly · 26/08/2021 16:01

Yes at risk of sounding like a classic MN "you don't known you're born until you've raised 20 kids living in a ditch" person, it's really not as easy as that for everyone to just move in with a friend or an AirBnB. If you have young kids, pets etc and loads of stuff it would be an exceptionally nice friend to take you in for more than a few days at most and finding an AirBnB big enough/that takes pets/in the right area (kids have to get to school, you need to get to work etc, harder if you don't drive) could be impossible or really expensive. And it might then take you 6 months or more to find a new permanent rental that will accept you cf the poster above's experience (in some areas there is a very bad shortage of suitable family-sized rental properties), all the while paying a premium for temporary rental plus storage costs for all your furniture, basically not everyone is lucky enough to be able to accept having to pay that much extra as a minor inconvenience not worth bothering their landlord over. If the tenants are in that scenario they could well be dependent on the council to get re-housed and if they move out even a day before they absolutely have to, ie are evicted by baliffs, the council will treat them as voluntarily homeless and refuse any help and then they'd be in trouble. And besides, even if tenants could inconvenience themselves by moving out asap to somewhere temporary, many will take the view that if they don't have to by the letter of the law, why should they? After all not many landlords (and I am not as violently anti-landlord as many on here) do more for their tenants than they are required to in terms of maintenance, rental increases etc so why would/should it work the other way?

Basically I think if you are a landlord you have to accept that when you want to liquidise your investment by selling the property it will either take longer to sell/be worth less with tenants in situ (because of the issues in this thread), or you will have to evict them then sell which will obviously leave you with a void period before it completes. Doesn't help OP too much of course but I think that's the reality. That's one of the many reasons why I am on a personal quest to contradict the many posters on the investment/money matters boards who always recommend buy to let as a 'safe' home for your money, it can be a good investment but the difficulty in obtaining your cash when you want it is one of the major downsides...

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