Buying a Tenanted property with Section 21 served by current landlord

by Readers Question

9:38 AM, 11th December 2015
About 4 years ago

Buying a Tenanted property with Section 21 served by current landlord

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Buying a Tenanted property with Section 21 served by current landlord

I am in process of buying my first Buy to Let investment property. The current tenants have been living in the property since June 2013. Current rent is £695 per month which is arrears. benefit

The tenants are on housing benefits and we can see from rent statements that the estate agent receives £569 each 4 weeks, 13 payments in a 12 month period with shortfall paid by the tenants.

However, the tenants have history of paying the shortfall rent on adhoc basis and current rent outstanding c £182 at present. We are in final stage of completion and have just found out that the tenants were served a Section 21 notice in March 2015 however the landlord decided not to enforce this and decided to sell the property with BENEFIT of tenants.

I am going to set up a new tenancy agreement effective from completion date and asked the estate agent to transfer existing TDS deposit to us.

So could anyone suggest whether should be aware of anything else before going ahead with purchase.

Many thanks

Rupang



Comments

Kelly Joanna

14:59 PM, 11th December 2015
About 4 years ago

This is true the law did change however, a retaliatory eviction counter claim would only arise if it were proven the landlord was not tending to maintenance issues, and that the issues were not of the tenants deliberate making. And signing a new 6 month AST means you are stuck with them for seven months because notice cannot be served within the first four months to end in month 6.

Steve Masters

17:59 PM, 11th December 2015
About 4 years ago

Why don't you negotiate with the vendor to jointly contribute to a cash incentive for the tenants to leave ASAP. There is a good chance these cash strapped tenants will bite your hand off.

Alison King

18:18 PM, 11th December 2015
About 4 years ago

I think you should establish exactly what the circumstances are and have been in the past. Are the benefits paid directly to the agent? When the benefits are paid four-weekly and the rent is due per calendar month it can create genuine confusion on both sides. Was the previous landlord or the agent less diligent than you would be? What is the maximum amount the rent has ever been outstanding?
You are wise to be cautious but it would be worth digging around to find out how much of a liability these tenants really would be.

Ross McColl

13:17 PM, 14th December 2015
About 4 years ago

Reply to the comment left by "Kelly Joanna" at "11/12/2015 - 12:02":

Hi, I beg to differ. My understanding is that Section 21's stand indefinitely, provided it was served on a tenancy that was issued prior to 1st October 2015, or at least until the amendments to the Deregulation Bill apply to all tenancies regardless of whether they were issued before 1st October 2015 or not. Can the Section 21 be signed over to the new owner as a tenancy would. Your solicitor should be able to provide you with a comprehensive answer. My advice is if possible do not give them a new tenancy, use the old one and serve the Section 21 as soon as you can.

Ross McColl

13:23 PM, 14th December 2015
About 4 years ago

Reply to the comment left by "Steve Masters" at "11/12/2015 - 17:59":

A cash strapped tenant is not as desperate as a homeless one. If they leave voluntarily the council will deem that they made themselves, 'Intentionally Homeless', hence getting rehoused will be very difficult. It would have to be a big cash incentive to make this worthwhile.

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