10:53 AM, 28th August 2014, About 12 years ago 12
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Can anyone advise on how to deal SAT agreements?
I am currently looking to purchase at (Scottish) auction and have noticed that many of the proprieties have sitting tenants on SAT agreements. This is reflected in the price and therefore the properties are normally heavily discounted from area comparables. My limited understanding of SAT agreements is that this makes it very difficult to evict the tenant which in turn devalues the property. The SAT agreements are always outdated, achieving way below market value with regard to rental income.
I am looking to find ways to overcome these problems so that I can take advantage of the opportunity rather than let it pass as most other investors do. Most of these properties do not sell in the room.
Many thanks in advance for everyone’s thoughts.
Andrew Hayworth
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Member Since January 2011 - Comments: 12120 - Articles: 1363
10:57 AM, 28th August 2014, About 12 years ago
Hi Andrew
Scots law is something I not particularly clued up on, however, I very confident that an SAT is very similar to an AST in England and Wales.
My advice to you is that you should get a copy of the agreement as well as the auction pack and read it carefully. If there is anything you don’t understand then take legal advice from a qualified and insured professional.
Remember, auction purchase = caveat emptor = buyer beware!
The Scottish Association of Landlords should also be able to help you, please see >>> https://www.property118.com/scottish-association-of-landlords-membership/
.
Andrew H
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Member Since December 2013 - Comments: 40 - Articles: 1
11:01 AM, 28th August 2014, About 12 years ago
Thanks Mark.
What I meant to refer to was sitting/regulated tenants.
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Member Since January 2011 - Comments: 12120 - Articles: 1363
11:22 AM, 28th August 2014, About 12 years ago
Reply to the comment left by “Andrew H” at “28/08/2014 – 11:01“:
Unless you can bribe them to leave there isn’t a lot you can do. If was easy the person selling would have done it.
These are long term investments, i.e. when the tenants move on or die you get vacant possession (not always though) and when you do the value increases to OMV (open market value).
Such investments are not attractive to mortgage lenders.
This is why they appear to be cheap!
.
Andrew H
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Member Since December 2013 - Comments: 40 - Articles: 1
11:37 AM, 28th August 2014, About 12 years ago
Many thanks Mark.
Mark Alexander - Founder of Property118
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Member Since January 2011 - Comments: 12120 - Articles: 1363
12:06 PM, 28th August 2014, About 12 years ago
Reply to the comment left by “Andrew H” at “28/08/2014 – 11:37“:
If the properties are advertised as being subject to SAT’s, what leads you to believe they are regulated tenancies?
.
Andrew H
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Member Since December 2013 - Comments: 40 - Articles: 1
12:55 PM, 28th August 2014, About 12 years ago
That was a stupid mistake on my part…
In England, what is the difference between a SAT and an AST?
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Member Since January 2011 - Comments: 12120 - Articles: 1363
12:58 PM, 28th August 2014, About 12 years ago
Reply to the comment left by “Andrew H” at “28/08/2014 – 12:55“:
SAT’s are the Scottish equivalent to AST’s, there are no SAT’s in English law to my knowledge
Andrew H
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Member Since December 2013 - Comments: 40 - Articles: 1
13:03 PM, 28th August 2014, About 12 years ago
Thanks Mark.
Scottish Association of Landlords
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Member Since June 2013 - Comments: 19 - Articles: 1
14:28 PM, 28th August 2014, About 12 years ago
Hi there Mark and Andrew
Late to the fray today – we have two big conferences coming up (agents next week, landlords on 4 November) so it’s all hands on deck this week.
Looks like you’re all clear now, but feel free to contact us if we can be of help Andrew with any property you’re seriously considering.
We can advise you on the old style tenancies if you need it but we’d certainly concur on the caveat emptor
Best wishes from all at SAL
Andrew H
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Member Since December 2013 - Comments: 40 - Articles: 1
14:30 PM, 28th August 2014, About 12 years ago
Many thanks SAL.