Sale and Rent Back Question

by Readers Question

3 years ago

Sale and Rent Back Question

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Sale and Rent Back Question

Discussing the possibility to buy a house with Tenants. However the tenants sold the house to current landlord in 2008 as a SARB. I need to check the date of the transaction to ensure it was legal then but what about buying it now? Sale and Rent Back Question

Would there still be issues with buying the house, is it still a SARB if I buy it? Would mortgage lenders lend against it?

After reading through the numerous threads on SARB’s this seems to be OK but I can’t help thinking there may be a trap in it somewhere and going forward may end up messy and expensive.

Regards

Rob



Comments

Mark Alexander

3 years ago

Great question Rob, I hope somebody posts the answer because I'm not sure myself.
.

Anthony Endsor

3 years ago

Hi Rob

Back in 2008, and indeed throughout the recession, SARB was a fairly common practice. The idea being, the property owner could no longer afford to pay the mortgage, or for some other reason needed to sell in a hurry, so a company would buy the property at a knockdown price and rent it back to them.
In most cases the tenancy was little if any different to any AST as far as contracts, etc were concerned. Many who bought properties in this way have since sold on for a profit. This really deems the SARB as it would have been known, void. What does remain in place is any AST that is still running. As soon as this expires it is periodic.
Your issue now is, do you want to buy the property tenanted, or with vacant possession. I would go with the vacant possession option myself in this case, therefore buying a property as a 'blank canvass' so to speak, and organising my own tenants later.

amelia

9 months ago

i myself sold my property to a sarb company and i am now in the process of suing the surveying solicitor they used for negligence as they did not tell us that the buyer pulled out but gave contract to another all the fraudulent transactions were not made aware to us until several years later will let you know how i get on with the solicitor advising me


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