Buying a property with a regulated tenancy – READERS QUESTION

by Readers Question

10:04 AM, 28th August 2012
About 6 years ago

Buying a property with a regulated tenancy – READERS QUESTION

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Buying a property with a regulated tenancy – READERS QUESTION

I am considering buying a property with a regulated tenancy. It is occupied by one person who is getting on in age. As I understand it once the tenant is no longer living there, either by going into residential care or moving or passing away, the property becomes mine to do with as I wish. Is there anyway that some one not presently living there can claim to take over the tenancy, such as a relative or friend who moves in to care for the elderly person or just another family member.

Also if I purchase the property in the name of one of my children does this create problems with HMRC?

Many thanks Peter

Editors Comments

Thanks for your email Peter which I have published as requested. I did a Google search on the word regulated tenancy and found a PDF explanation document produced by “Communities and Local Government which you may find useful – see >>> http://www.communities.gov.uk/documents/housing/pdf/138295.pdf

My advice is:-

  • Be wary of financial advice on forums, there will be a variety of opinions, some of which may be right and others may be wrong. Always seek professional advice. Forums are great to get a good idea of what questions you should be asking but advice offered by readers (particularly financial advice) should be read as ‘opinions of friends’ and should not be relied upon.
  • There are many form of regulated tenancy, find out exactly what you are dealing with.
  • If you buy the property in the name of your children this may create a potentially exempt transfer. The gift could attract inheritance tax of up to 40% if you die within the next seven years. Please consult a tax adviser. If you would like me to refer you to the person I use please email your contact details to mark@property118.com
  • We are not aware of any lenders who will provide finance on properties with regulated tenancies. Peter may not require finance but if any readers are aware of lenders offering terms we would be very interested to know about them.

Question from Editor Regarding Properties with a Regulated Tenancy

  1. How much discount would you expect to receive on a property with a regulated tenant vs an identical property with vacant possession?

  2. Would the expected discount vary depending on the age of the tenant?



Comments

Annette Stone

1:30 AM, 29th August 2012
About 6 years ago

I have bought a few of these in my time and with most regulated tenancies with a registered rent there is an automatic right for the person with the tenancy to pass it to a spouse or child or other person who can be proved to be living at the property at the date of death of the original tenant. There is only one opportunity to pass on a tenant but I do not know how long the residency requirement is.
Also many people buy these tenancies when they can pick them up cheaply and do one of two things - either try and buy out the tenant if they are a young person or if the person is elderly they try and establsh whether the person is single or living with someone likely to inherit the tenancy.
Lot of big companies specialise in buying these tenancies as they can be very valuable, especially in expensive areas of London

12:04 PM, 30th August 2012
About 6 years ago

The spouse must be living in the property at the time of death and succeeeds to a regulated tenancy. Any other family member must have been resident for 2 years and succeeeds to an
assured (not shorthold) tenanct


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