Buying a property already tenanted through an agent

by Readers Question

3 years ago

Buying a property already tenanted through an agent

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Buying a property already tenanted through an agent

I am buying my first buy to let and I am going complete in the next few days.  Buying a property already tenanted through an agent

The property is already tenanted by the same agent I bought the property from.

When I viewed the property I mentioned to the agent that I intend to go solo when letting the property, and it was my understanding that I could do so retaining the tenant.

I now met with the letting officer to understand the level of service they are offering and he mentioned three levels of service (fully agented, collection, letting only) but he did not mention (and I didn’t ask) what happen if I want I can go solo.

If I decide to go solo do I have any obligation to the agency? (i.e. can he ask me to pay the letting fee which is a percentage of the rent I will receive till the end of the current tenancy?)

Please let me know if you need further information.

Looking at the forum I found this posting which seem to be related: http://www.property118.com/buying-a-rented-house-and-not-retaining-the-agent/37711/

It seemed to indicate that I should not have any obligation to the agent and that it is the seller that is responsible for breaking the contract with the agent.

In these latter circumstances the tenant be impacted?

Thanks

Frances



Comments

Mark Alexander

3 years ago

Hi Frances

If you are dealing with a good Conveyancing Solicitor then he/she should make sure that such matters are dealt with BEFORE you exchange contracts.

There are others matters which need to be dealt with too, e.g. informing the tenant of the change of landlord, deposit protection issues etc.

Have you exchanged contracts yet?

In future, when buying a tenanted property, please make sure you instruct a solicitor who has specialist knowledge of transactions of this nature and not just somebody who only ever deals with home-owner conveyancing, it is different!

Please see >>> http://buytoletconveyancing.co.uk/

PS - if your solicitor has done his job right he will be able to confirm in writing that you will not be liable to fees to the agent, that your tenant will not be affected, when the GAS safety certificate expires, that deposit protection has also been dealt with and that you will be fully compliant in every regard, e.g. if you need any form of licence.
.

Very much a belt-and-braces reply from Mark.

Its certainly important to get confirmation of gas safety, deposit etc as these are things which could bite you on the bum later.

It also makes sense to get written confirmation of the fee situation, but speaking as an agent myself, my view is that in a similar situation I have no contract with the buyer and cannot impose any charges on him/her.

Even on the issue of the sale / purchase of the property my contract is with the seller, not the buyer, and I certainly don't have any sort of contract with the buyer where the tenancy is concerned. It follows that if the buyer wants to "go solo" there's not a thing I can do about it.

It doesn't stop some agents trying though. Last year I personally bought a property with a tenant in situ managed by a rival agent. As it happened, despite instructions to the contrary the tenant paid another month's rent to the old agent. The old agent initially refused to hand it over to me "because the seller hasn't paid us the fees he owes us for early termination". It took some very stern words from me before he coughed up the money.

Cameron David

3 years ago

It is ok for the agent to find a suitable property for you, which you deem to be a good investment, to help you start your property portfolio, and there you have it, you are benefiting from unbroken rent from day 1 as a result of the agent's introducion ..... but you still begrudge the agent a small fee for the benefits you are gaining. Some of the people on here are unbelievable. Do the right thing and work with the agent, as without them you wouldn't have had the property in the first place. There are plenty of buyers around and you should be grateful for the agents work and not resentful.

Fra Rex

3 years ago

Thank you both very much.

We exchanged already and we are going to complete tomorrow. Yes my solicitor carried out all due diligence for tenanted properties (e.g. deposit protection certificate, get references for the current tenant, electricity certificate, inventory, etc.), the property doesn’t need a gas certificate because it does not have gas (the heating and hot water are centralised, the hob is electric). Further I met the tenant and he seems a nice guy.

I wrote to my solicitor asking for advice of what to do with the rent, etc. after completion and if I have any obligation to the letting agent considering that I did not have to sign anything with them.

To be honest, my understanding is that I do not have any obligation with the agent as a letting agent and that I am free to decide what to do. That’s what I said to the agent when I decided to put an offer on the property although I also told him I could have considered a certain level of service, I need to check my correspondence with him if I got something in writing.

Fra Rex

3 years ago

Re. last comment from David.

Yes of course, that is my intention in case there was/is any misunderstanding, but I also need to know what is my freedom of movements.

Overall the agent has been nice and I have been considering to send him a gift after completion.

I worked out the financials for the transaction without considering the property being agented because that is what I said to the agent; if now I must go for any level of service (between 9% and 12.5% + VAT) or I have any obligation to pay the agent, the property the financials wouldn’t have worked and I would not have gone for the property in first instance.

Neil Robb

3 years ago

Cameron David

If the agent has any whit he will look at the bigger picture and know he is not due anything from the new owner. His actions now could result in repeat business. As the landlord needs a new tenant eventually or grows the portfolio. I always remember people who look out for me.

I have bought over ten properties from one agent does he give me a call when good deals come in. No so it works both ways. How much commission has he made from me.

Plus as many new landlords find out it is not easy managing tenants so they may decide to go back and use them.

The seller would have probably paid the agent a commission to say Some of the people on here are unbelievable I think is unfair. If the lady never bought the house the agent would not get the fee from the seller.

So lets put it into prospective how many agents have found bad tenants and put them into properties who the did not pay rent or damage the property when asked for proof they were vetted can not supply evidence. when chasing rent or eviction do little to help. Over charge when arranging repairs. Moving tenants into other properties to get fees from tenant and landlord one told the landlord wants the property back the tenant told the landlord wants it back. Just a few tricks letting agents do.

I don't think when using these sites people should be offensive as we are here to help each other and pass our experience. I don't mean any offence by this just pointing out how I felt when I read that comment.

Fra Rex

3 years ago

In the end everything seem to have worked out fine, the agent is going to help me transferring the tenant under the same terms as he had with the agent and I will be making a gift to the agents although I am not required.

I probably need to draw a new contract with the tenant though…

… in part I was wandering it is fine to add a note to his existing contract to say that the payment should be made directly to me and that all other conditions remain unchanged.

Many thanks!


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