Shelter’s Income and expenditure figures highlighted13:57 PM, 4th February 2019
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As being a landlord becomes less financially lucrative, with higher taxes and more regulation, there are more properties coming to market with existing tenants. We’ve put together the things you should be considering if you are buying a property with a tenant. We have also looked at what the process is if you wish to take vacant possession.
You should find a solicitor who is experienced in dealing with this kind of purchase and who will advise you of any red flags or concerns they have from a legal point of view. They will know the law inside out and the right questions to be asking the other parties concerned.
If you need a mortgage, you will need to check that your lender will allow you to borrow the money necessary. You will also need to ensure that the sums add up and that the rental payments will cover your repayments. The calculations by the lender will be based on the market value and not what is being paid by the current tenants, so this is something you will need to bear in mind when looking for finance.
If you decide that you want to purchase the property with an existing tenant, you will need to issue a new tenancy agreement with all the associated checks, you can find an article on what this includes here
You will also need to ensure that you are adhering to all the legal obligations that a landlord has such as having a valid gas safety certificate.
The deposit will have been made to the seller, and this will therefore need to be transferred to you, and you’ll need to register it with an appropriate deposit scheme as soon as possible.
You will need to ask the current owner and therefore landlord to arrange to serve a section 21 notice to the tenant, this will need to be in writing to the tenant stating they are being given 2 months’ notice. If the tenant fails to move after the notice period, then they can instruct us to help with possession proceedings.
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