Sold to a tenant…

[good96]

Hi all,

We have recently accepted an offer from a tenant in one of our rented properties. The offer was accepted 4 weeks ago and we aren’t near the stage of exchange yet.

I was made aware by a neighbour that the tenants have started to do building work to the property (this hasn’t been authorised by us) I drove by the property tonight and it is clear to see that it is indeed a building site…. We have not been able to contact the tenants.

The concern that I have is if the sale collapses for whatever reason then we are left with a building site that will have depreciated in the value.

Any advice welcome?

I’ve spoken to them today and asked them why they had proceeded to start work on the property even though the sale hadn’t completed?

Their response was that they were confident the sale was going to go through and they wanted to get ahead of themselves and do the external work in the summer…… They didn’t think it would be a problem and that apparently we wouldn’t know?!!

Even though there is a skip outside full of the old kitchen and bathroom? Because there is old carpet on the driveway? Also the fact we’ve owned the property for the last 22 years and we know the neighbours well.

I told them to secure the site (the conservatory had been demolished and no windows in kitchen as they extending out) and stop all work until the sale completes. If for whatever reason the sale collapses then I have told them that they are to pay the total cost to restore the property back to a habitable condition.

If I was you I would let them carry on because if it does collapse then you’ll be left with a building site and may struggle to recoup the costs. Also they may not get a mortgage if the surveyor finds it not habitable.

“Because we thought you would not find out”

Good lord

Bloody Hell!

I hope the sale goes through as soon as possible, OP, and you can walk away from this without any losses.

You need to put what you 'told them' in writing. This needs to be documented in case the sale falls through.

Yes, this.
If it’s not in writing it didn’t happen !

And their mortgage valuation- have they had it?

Your solicitor needs to write to theirs asking them to stop work and commit to reinstating what work has been done should the sale not proceed. Do they not need pp to extend ?

Indeed, that's a very good point.

Just had an update from my solicitor this morning, we should be on track now to exchange by mid July all being well.
The buyer not having a survey done, they’ve chosen not to ‘as they know the house’ and they want to completely gut it! Well… they’ve already gutted it!

Just the waiting game now but a little relief to have a closer date, can’t wait till completion now!

Good update. Unfortunately they have put you in a position whereby you don’t really have a choice but to sell to them; a house is not mortageable with no kitchen or bathroom. Well done on not losing the plot with them. You are a better grown up than me.

Fingers crossed all goes to plan now. At least it sounds they really want your house and it’s a good job you haven’t changed your mind.
Maybe that’s their way of ensuring you sell to them and no one else. They’ve taken quite a risk haven’t they ?
Scary to have that happen to you though !

Have they already had a mortgage survey? If not they (and you) are screwed.

Yes - mortgage survey was initially done early on in the process. I’m glad we done that otherwise would have been shafted.

It’s a massive risk for them as I would be seeking costs to put the property back to a habitable condition. Would be at least £50k with the work they’ve done already to gut the place. It’s a shell essentially. Their motive was to get the work done in the summer in the better weather… Hmmm…

We were looking to downsize our rental portfolio anyway so was an easy option to sell to a tenant. I’m sceptical about selling to a tenant in the future - I’ll just make them aware that no building work takes place until completion.

Just had an update - we’re now exchanging on Friday and hopefully completing next Monday! So happy!

Phew- am so pleased for you OP!

That's good news. I'll keep my fingers crossed for you.

I'm amazed a builder has agreed to do this, without them Being the owner. I couldn't even get a quote for a new front door, until I actually owned the house. (Bought from my landlord.)

I think the assumption (from what the OP has written) is that the tenant/purchaser is doing the work himself because he's a builder by profession. But I've had plenty of quotes and work done and none of them ever asked me if I owned the property. I did own it, and the tradesmen probably assumed that I owned it, but none of them ever actually checked.

Thank goodness everything’s moving so quickly, the cheek of the people!

The tenant has done all the work. We exchanged today and completing on Monday - all relieved now!
Lessons learnt - if you agree to sell to a tenant - have an agreement on place to not to do any work without auth!

Phew! Tbf, @good96, you’d think that most people would realize that when they don’t legally own a property, they can’t start building work on it. 😂

That's great news. I'm glad it worked out. 

Wonder what would have happened if the tenant did all the work and then you evicted them? Glad it worked out for you.

Yep definitely!! They thought they could do it on the quiet because we live about 45 mins away we wouldn’t check and would never know.
I don’t think they thought that we’ve owned the property for years and the neighbours would have told us!
I agree there would be no credible builder that’d do this work - they’d risk not being paid for starters…