Renting to a prospective purchaser?
12:08 AM, 6th June 2023, 3 years ago
25
Hi all, I am in the process of selling my mother’s house, which is empty and have had a prospective buyer since March.
However, there have been some problems regarding the sale and this has caused the transaction to take much longer than usual and may still take another 3 to 4 months for completion.
The purchaser is keen to continue with the transaction, but has now asked if it would be possible if he could rent the house until completion. He is renting at the moment and has said he would have to give one month’s notice but he would like to move as soon as possible and has asked if I would consider this as an option.
I am a landlord so I understand the basics of letting properties but have never encountered this before so not sure if it would be wise.
Part of me thinks it’s a good idea but the cynic in me says it’s not!
I would appreciate any advice please.
Ashleigh
Tags:
advice, Advice for UK Landlords, landlord, Renting Before Buying, sell to a potential tenant, selling a house, Selling Property UK, UK Landlord Dilemmas
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Member Since October 2013 - Comments: 52
2:08 PM, 6th June 2023, About 3 years ago
Many thanks for all your useful comments. A real mixed bag of opinions and suggestions. I will now give it some serious thought and consideration.
Thanks again!
Member Since May 2023 - Comments: 2
7:48 PM, 6th June 2023, About 3 years ago
I feel that this is one the situations where “it depends”. If it works well it could be great but if it doesn’t it could be disastrous.
Particular things I’d consider:
– cost of letting the property. Does it have up to date gas and electric safety certificate. If not and the property is old (and you find a strict electrician) you may need pay for some works to legally rent the property
– liabilities if tenant damages something and refuses to pay for repairs as a tenant but as buyer expects things to be as described in paperwork
– concerns tenant asking for discount of sale price when eventually noticing something about the property they don’t like
– stamp duty/ other tax considerations
The main concern I’d have is that you’d be pretty much at the mercy of the tenant buyer if they wanted to renegotiate the price or terms. If they pulled out of the purchase (eg couldn’t get mortgage) are they the type of tenant you’d still be renting to? Eviction and finding a new buyer could be time consuming and costly if needed to be done.
Member Since April 2021 - Comments: 189
8:07 AM, 7th June 2023, About 3 years ago
The agent can’t ask for an additional letting fee as presumably they are getting a sales fee {Foxtons, 2009}. However if the sale falls through they may be entitled to something. It will probably not be included in the Sales terms – you need to speak both to the agent and your solicitor
Member Since October 2020 - Comments: 1137
2:43 PM, 8th June 2023, About 3 years ago
Reply to the comment left by Graham Bowcock at 06/06/2023 – 11:49
You’re probably right about the deposit being ok if its under a different contract, but the landlord should probably ensure the contract is carefully worded.The definition of tenant in the TFA includes prospective tenant and former tenant, so I could see a wily tenant/buyer taking a punt on a case with those sorts of sums involved.
Member Since May 2023 - Comments: 1
10:18 AM, 10th June 2023, About 3 years ago
Reply to the comment left by Robert Shread at 06/06/2023 – 09:24Was this after you exchanged contracts? I tried doing this as a prospective buyer, the estate agent’s boss blocked it saying I was ‘trying before buying’.. My solicitor wasnt ready to exchange until she was satisfied.