Renting to a prospective purchaser?
12:08 AM, 6th June 2023, 3 years ago
25
Hi all, I am in the process of selling my mother’s house, which is empty and have had a prospective buyer since March.
However, there have been some problems regarding the sale and this has caused the transaction to take much longer than usual and may still take another 3 to 4 months for completion.
The purchaser is keen to continue with the transaction, but has now asked if it would be possible if he could rent the house until completion. He is renting at the moment and has said he would have to give one month’s notice but he would like to move as soon as possible and has asked if I would consider this as an option.
I am a landlord so I understand the basics of letting properties but have never encountered this before so not sure if it would be wise.
Part of me thinks it’s a good idea but the cynic in me says it’s not!
I would appreciate any advice please.
Ashleigh
Tags:
advice, Advice for UK Landlords, landlord, Renting Before Buying, sell to a potential tenant, selling a house, Selling Property UK, UK Landlord Dilemmas
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Member Since May 2023 - Comments: 8
9:24 AM, 6th June 2023, About 3 years ago
I had the same situation with a commercial Property. I asked for a 10k non-refundable deposit if the purchaser failed to go through with it. My Solicitor said it was most irregular, but I insisted.
So they rented for 6 months whilst they got their finances sorted and then we completed the transaction.
Member Since November 2018 - Comments: 67
9:28 AM, 6th June 2023, About 3 years ago
I have done this without any issue. Take a deposit and charge market rent and provide a contract. Win win situation
Member Since June 2022 - Comments: 111
9:48 AM, 6th June 2023, About 3 years ago
What happens if the sale falls through and the tenant then refuses to move out??
Member Since May 2023 - Comments: 8
9:50 AM, 6th June 2023, About 3 years ago
In my case, I had 10k to spend on evicting them.
Member Since March 2022 - Comments: 363
9:59 AM, 6th June 2023, About 3 years ago
Legally you must give the tenant an Assured Short term Tenancy agreement,. a copy of the EPC cert (which must be a minimum of an E) a copy of the Government “how to rent booklet” and a current Gas and Electrical safety certificate. A gas cert will cost something like £60 (if nothing is wrong) and electrical cert will cost around £150 if they don’t find anything wrong (unlikely in my experience) You don’t have to take a deposit but if you do it must be registered. Might be best to get a letting agent to arrange all this for you. While you think you are unlikely to have problems if you need to evict, and the tenant does not leave when requested you will need this all to be in place to proceed to get a court to evict which might take months and months to achieve. Also don’t forget to take out landlord insurance for the building.. .
Member Since June 2022 - Comments: 111
10:13 AM, 6th June 2023, About 3 years ago
Reply to the comment left by northern landlord at 06/06/2023 – 09:59
The agent involved with the sale may look for a letting fee as it will be apart of their T&Cs because they introduce the tenant.
Member Since March 2022 - Comments: 363
10:58 AM, 6th June 2023, About 3 years ago
Reply to the comment left by David Smith at 06/06/2023 – 10:13That’s right, and many letting agents agreements have a term that if you sell to your tenant you will owe them estate agents commission.
Member Since October 2013 - Comments: 1630 - Articles: 3
11:03 AM, 6th June 2023, About 3 years ago
If the purchaser completes on the property, there is no need for eviction! Insist on a 10% deposit on Exchange.
Member Since January 2020 - Comments: 559
11:05 AM, 6th June 2023, About 3 years ago
As a long time agent and landlord I’ve never advocated this type of arrangement. However, I did do it once with a house that had actually been my family house. A local lady was going through a divorce and waiting for money, but wanted to buy our house.
I’m pleased to say it worked and after more than 20 years she’s still there. In my situation, though, if the lady had stayed as a tenant it would not have been the end of the world for me as we had rented the house out after moving from it.
The key thing is to set the tenancy up properly in case the tenant cannot or does not subsequently buy.
Member Since May 2014 - Comments: 195
11:31 AM, 6th June 2023, About 3 years ago
Reply to the comment left by northern landlord at 06/06/2023 – 10:58
Surely, as ‘professional’ LLs, you read through the agent’s terms and delete all of the onerous stuff that they put in. I do and have never been rejected