Buying tenanted property (to live in).

[wall2wallcarpet]

Asking for a friend who has had an offer accepted on a flat (which he plans to live in) that is currently rented out to someone else with the vendor as landlord.
Obviously the contact will specify "vacant possession upon completion" but is there anything else he needs to think of? At what point in the conveyancing process should he expect the tenants to be asked to go / gone?

I looked at this but you can't stipulate a vacant possession if there is still tenancy left to run so they may want to look at this

So he needs to find out the status of the tenancy and how long it has to run? What if it's a one month rolling type thing?

You'd think the agent would offer this info at the time of viewing!

Yes

If it's a rolling tenancy he will be in a better position than if it's a standard tenancy. You need to look into tenants rights (and reverse them) to understand where he'll stand. Agents won't volunteer this information

It's not for the agents to manage, it's for the current owner / landlord to manage. The agents may have no clue at all about letting a property or how it works and certainly won't advise your friend. They need to get all the details from the owner and speak to a solicitor.

Personally I wouldn't touch a place with a sitting tenant if you paid me the mortgage deposit!

There's no guarantee they will leave in the timelines you want, and no guarantee about the condition it'll be left in. I'd insist on an inspection as soon as it's empty and ensure it's in a condition that reflects the agreed price. If it's been trashed, they'll want to renegotiate the price.

Only saying that as my mates are now selling their rented house whilst vacant as the tenant failed to tell them about a water leak in the kitchen and hid it during inspections. It now requires a new kitchen and major works because the floor and joists have collapsed in the corner. The garden was also 8ft deep in brambles. They are having to make it all good before they can sell.

If your friend is happy to proceed, they need to be fully informed of the potential risks here.

It sounds very risky to me 😕

I wouldn't go near a tenanted property. It so difficult and lengthy to evict, if it comes to that

As pp have said, no matter what sort of tenancy it is, the tenants may not want/or be able to leave if the tenancy finishes/is ended.

If the tenants are still in the house when your friend takes possession, it will be up to him to get them out.

I'd say your friend shouldn't go any further until the tenants are out and an inspection can take place.

If the tenancy is fixed term then they won't be able to give notice except to coincide with the end of the fixed term.

If the tenancy is a rolling contract and in England then they can give two months notice. They will need to ensure the S21 notice is valid - there's several things to do there.

The tenant is quite within their rights to stay beyond the two months notice, at which point the landlord will have to apply to the courts, wait for a court date, get a possession order, then order court appointed bailiffs to actually regain possession. It could easily be 6-12 months from the point of issuing the S21 notice to a tenant on a rolling contract.

Is your friend on a timescale?

The tenant is likely angry and upset about losing their home in a time like this when it's impossible to find anywhere to rent, they have ample opportunity to punish both the existing landlord and the prospective buyer by trashing the property.
I don't think I'd go there

That's a good reason for not exchanging until the property is vacant and you've inspected

Most people redecorate when they move in though and the damage (if any) is unlikely to go beyond the decor you were intending to replace anyway.

No exchange until property is empty.

Keep looking in the meantime.

Yes. He should not exchange contracts until the tenant has left and he has seen the property is actually empty.

"Vacant possession " is a legal term and the sale should of course be with vacant possession. The seller should be arranging for the relevant notices to be served on the tenants and the buyer's solicitor can check with the seller's solicitor that this has been done and ask for updates.

The main thing he should do is buy a different property! I agree with PPs about avoiding tenanted properties. The landlord should ideally only market once the property is vacant. Unless this is a dream home, I would buy a different one.

The landlord is trying to have their cake and eat it, they don't want to get rid of the tenant before the place is sold because that will mean there's no rent money coming in.
This suggests that they need that rent money really badly or they would see that this is a disastrous strategy that will end up with them getting no cake at all.

If the tenancy was close to its end, or straightforward to end very quickly, the owner would undoubtedly have done so to enhance the price he can sell it for.

He didn't/hasnt/couldn't.

That should tell your friend that it's not going to be vacant soon.

Yeah LL is trying to squish as much rent out before exchange as possible
If it is a 1 month rolling contract and the tenant just leaves without fuss then great.
If the tenant refuses to move then you have months and months of court battles and if your friend owns the house by that point it will be at his cost

A different perspective.

I bought my current home from a landlord who was selling up, his tenants were still living here when he marketed the property, and during my viewing.

My purchase was subject to vacant possession upon completion, and I strongly suspect the landlord incentivised the tenants to leave in line with the required timeframe to guarantee our completion. I’d be willing to bet he paid their onward deposit for their next rental as part of this incentive.

The thing I insisted on was a pre-exchange visit so I could confirm the tenants had moved out (and that the property hadn’t been damaged or trashed on exit). This took place 4 weeks before we were pencilled in to complete.

I got an excellent deal on the price precisely because most people would not consider the property with tenants still living there.

However, I wasn’t buying with a mortgage, and I had no barriers to pulling out and staying put in my previous home if the tenants had not moved out by the time of the pre-exchange viewing. So I fully understand why most would not take the risk in different circumstances to mine.

I’d be willing to bet he paid their onward deposit for their next rental as part of this incentive
With the current state of the rental market that's not going to happen here is it?

I wouldn't be spending money on a survey, searches or solicitors fees until the property was actually vacant.

As pp have said giving notice and potentially evicting a tenant could take months. By which time your friends agreement from the mortgage co could have run out and the rates risen in looking for a new one.

Last time I bought I only agreed to look at a tenanted property because the tenants had exchanged on a property they were buying, and had packing boxes everywhere.

Your friend needs to read up on Section 21 eviction notices, and quiz the vendor / agent closely on the status of the tenants, notice period, notice required, whether eviction notice has been issued etc.

Could be that the vendor is selling because long standing respected tenants are moving out and so it seems a good time, OR that the vendor has not given the tenants notice, they are unwilling to move and will wait to go to court, and beyond. Months and months.

With the current state of the rental market that's not going to happen here is it?

Well, to be fair nobody here has any ideal what the current tenant's position or circumstances are.

Perhaps they have given notice themselves. Maybe they are in a position to be buying their own home elsewhere. Perhaps they've inherited a house. Could be emigrating. Maybe they have found an alternative rental property they prefer and are keen to go. Moving for work.

Not all tenants who leave rented homes are unhappy or are being pushed out by unscrupulous landlords. And the OP hasn't provided any information that suggests this, so impossible to assume either way.

My example just highlighted that if a landlord is very motivated to sell, and is in a financial position to do so, there may be ways they can secure vacant possession that works smoothly for all parties involved.

Adding to the collection of voices saying it's high risk. I would have been prepared to offer on a tenanted property but I wouldn't have been prepared to exchange until the property was vacant.

Your friend needs to be extremely cautious. If you buy a property with a tenant on a rolling tenancy as Section 21 is coming to an end and unless the tenant is behind with the rent or causing a social nuisance in a month or so it will be illegal to evict. Section 21 is being stopped and Section 8 is beefed up to deal with those in arrears on rent or causing damage to property or being anti social to neighbours. If it's a fixed term tenancy then they will have to wait for the tenancy to end and tenant to.be given notice. At the moment it's 2 months but a new bill in parliament I think it's 4 months notice to be given. Easier to look for an empty flat. If the tenant refuses to move out they will need to go to court to get eviction order. People are always on MN saying they are refusing to leave at the end of the tenancy.

Tell your friend not to exchange contracts until the property is vacant. Completion can follow v quickly.

In this circumstance, you can be 99.9% certain that no mortgage lender will touch the property or this borrower. Additionally, should matters progress while the lender is unaware, borrower's solicitor has a moral/legal duty to inform the lender of the situation regarding a tenant in situ.

My friend is not stupid and will not exchange contracts until the flat is empty. But he has his own timescale (moving cities due to change of job). From what has been said on here; if the vendor is serious about proceeding they need to start the process of evicting the tenant ASAP. Friend likes location and layout of the flat a lot, but obviously does not want to incur survey costs and a lot of legal expenses until the flat is ready to be sold.