Buying a property with vendors wanting to stay a few months?

by Readers Question

16:21 PM, 31st January 2017
About 2 years ago

Buying a property with vendors wanting to stay a few months?

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Buying a property with vendors wanting to stay a few months?

I plan to buy a house as a buy-to-let investment. time

The sellers have asked if they can continue to stay at the property (and pay rent) for a couple of months while some work is carried out at the house they are buying. I have no problem with this as I plan to rent anyway. I would simply put it on the market once the sellers vacate.

But it does mean the house would be sold “without vacant possession”. Is there a way I can agree to the vendors staying at the property for a couple of months without them accruing rights of occupation? I could ask them to stay at a hotel for a night or two at the time of the sale if this would signify a “clean break” but I don’t think they would want to move all their furniture out and then back.

Many thanks

Nigel



Comments

Mark Alexander

16:28 PM, 31st January 2017
About 2 years ago

Oooo, be very careful here.

Sale and Rent Back is a highly regulated activity. You can go to prison if you're not licenced by the FCA.

Chances of that happening are pretty slim though if you were planning to get a mortgage, because lenders won't lend. You could always lie to them of course but that could earn you another 14 years inside at HMP for mortgage fraud.

In short, don't do it!
.

Nigel Copage

16:45 PM, 31st January 2017
About 2 years ago

Reply to the comment left by "Mark Alexander" at "31/01/2017 - 16:28":

Thanks for this. I was not aware of the "Sale and Rent Back" issue.

Does this apply to a short fixed term agreement of two months? Or is it possible for the owner/vendor to stay in occupation ON LICENCE for a short period while his new house is fixed up?

Mark Alexander

17:00 PM, 31st January 2017
About 2 years ago

Reply to the comment left by "Nigel Copage" at "31/01/2017 - 16:45":

Hi Nigel

Sorry to tell you this but no mortgage lender would touch the deal either way.

What you could do though is an option to purchase agreement. That way, the existing owner could get the equivalent to the deposit you would have been paying anyway and you would get the option to complete the purchase with vacant possession between X and Y amount of time.
.

Nigel Copage

19:22 PM, 31st January 2017
About 2 years ago

Reply to the comment left by "Mark Alexander" at "31/01/2017 - 17:00":

I should have made it clear that I am a cash buyer so there is no mortgage lender involved and the total amount will be payable on completion.

Mark Alexander

19:36 PM, 31st January 2017
About 2 years ago

Reply to the comment left by "Nigel Copage" at "31/01/2017 - 19:22":

It's just the FCA you have to worry about then.

My advice regarding the option structure remains, buy you could of course pay as much for the option as you like on that basis. You could also do a long stop completion, i.e. exchange now and complete after three months.
.

Puzzler

22:22 PM, 31st January 2017
About 2 years ago

I expect the option to purchase or long stop completion won't work as it's likely this vendor cannot support both mortgages. Hence the request to stay on as a tenant.

Mark Alexander

22:37 PM, 31st January 2017
About 2 years ago

Reply to the comment left by "Puzzler " at "31/01/2017 - 22:22":

Ah, but that's negotiable. How would he have been able to pay rent?
.

Mick Roberts

8:00 AM, 1st February 2017
About 2 years ago

Nigel,

I've done this loads of times.

Mark is quite right, they bought this regulated law/rule in so many years ago to stop people buying houses cheap to keep people in, then chuck 'em out few months later, once the purchaser has bought his discounted property.

However, it hasn't stopped me still doing it Ooopss.... I ain't one of the bad ones that go back on me word & turf em out. As long as rent paid, can stop there forever.
I'm not sure if it's for Ltd company rules either, but Mark will correct me on that.

One could for example sign the tenancy with them two days after purchase, & as u say, things went wrong for them & they had to move quickly back into the property. You didn't mind, & u din't know what went off, as you din't get to the property till day of signing tenancy. As far as u were concerned, they did move out.

If you are worried, get 'em to sign with vacant possession, tell 'em they must move out & back in, what they do when you're not there, is not your business. Ooppss am I saying this on a public wall? Ha ha, doesn't mean I do it though before u all rollock me.

I think you'll be fine, they want to go, don't put any sale or rent back in their head, you'd be surprised how many solicitors don't know about it & complete knowing the vendors are staying.

I know the doom-mongers out there won't agree, but hey ho, two people doing something they want to do, let's not regulate against that.

Mark Alexander

8:16 AM, 1st February 2017
About 2 years ago

Reply to the comment left by "Mick Roberts" at "01/02/2017 - 08:00":

Hi Mick

Anybody doing what you have suggested has to accept the consequences if they are caught.

You might also have driven past your local school at 100 mph every day for the last 20 years and never got caught. One day though, you will be caught and they will throw the book at you.

Is it worth the risk?
.

Mick Roberts

8:28 AM, 1st February 2017
About 2 years ago

Ha ha u & the school.

Technically, legally u r right.

It's just me. I don't agree with the draconian rules bought in for the bad people, then us good ones have to comply & pay for the bad ones.
If I'd have followed the rules, I wouldn't have maybe bought another 10-15 since it was bought in, & these homeowners would have been homeless-Where's the justification in that rule maker?

So I get on my high horse & think stuff u.
EPC's 2007ish. U MUST do one. I have not had ONE SINGLE tenant ask for one.

Ooh I could go on & on-And u too.

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