Buying house with tenant on board?

cursai

In the process of buying a house at the moment. At the stage just before the loan packs are sent out.
Thing is there's a tenant lying in the converted garage from the previous owner.
I would like to keep him on but am worried that he would have some built up rights. I.e: part four tenancy etc...
Is it possible to start a brand new lease and have his as a new tenant if you get my meaning. maybe he'd have to vacate for a period or something.

Any advice appreciated.

Ken.

If you could start a new tenancy from scratch the tenant would have part 4 rights after 6 months. Is it worth the hassle for that you have to assess for yourself?.

cursai

ken wrote: »

If you could start a new tenancy from scratch the tenant would have part 4 rights after 6 months. Is it worth the hassle for that you have to assess for yourself?.

Could there be any other complications though. I've never been a landlord before. i'd be a sound one but that hasn't been tested yet.
Is is a good idea to continue the tenacy.
I feel for the guy as hes been there the last three years and i plan to get a new tenant in so why shouldn't it be him.

L1011

Bank may refuse to lend on a pprincipal private residence basis with a sitting tenant of any description

cursai

MYOB wrote: »

Bank may refuse to lend on a pprincipal private residence basis with a sitting tenant of any description

Bank have no involvement. This is a separate thing and after the sale. Whilst i understand what your saying. his notice HAS been given and all arrangements have been made for the freehold of the house. but ive been a renter for the last eleven years so id want to keep him on for both our mutual benefit. How would i separate the new ownership and keep the tenancy.

D3PO

cursai wrote: »

Bank have no involvement. This is a separate thing and after the sale. Whilst i understand what your saying. his notice HAS been given and all arrangements have been made for the freehold of the house. but ive been a renter for the last eleven years so id want to keep him on for both our mutual benefit. How would i separate the new ownership and keep the tenancy.

Firstly the bank do have an involvement. The bank if they are aware will not allow you drawdown without vacant possession of the property.

Secondly you cannot separate new ownership from the current tenancy. You cannot readjust the part 4 clock because you take over ownership of the property.

djimi

If the tenant has been there for 3 years already then their part 4 tenancy rights will effectively reset at the start of next year, as the part 4 tenancy runs in four year cycles, and for the first six months of each cycle you can terminate the tenancy for any reason with 112 days written notice.

To be honest, if notice has been given and you expect the tenant to vacate for a period then he wont be coming back (I sincerely doubt that they are going to move out all of their stuff and look for temporary accommodation for a short period of time just to suit you).

cursai

Then i guess the best thing to do is let him continue living there.
The only reason id ask him to leave that i can foresee is for refurbishment, i.e extending the main house into the converted garage.

But then how do i satisfy the banks requirements for vacant possession without asking him to leave for a period until the sale is completed?
Also can the Pt4 be excluded in a lease, i wouldnt have thought so?

I sound like a cruel despot but basically ive never done this before and i dont know how long id like to rent it out.

D3PO

cursai wrote: »

Then i guess the best thing to do is let him continue living there.

That's an awful idea

But then how do i satisfy the banks requirements for vacant possession without asking him to leave for a period until the sale is completed?

You cant you have to ask him to leave

Also can the Pt4 be excluded in a lease?

No you cannot sign away your part 4 rights they supercede anything written into any lease

I sound like a cruel despot but ive never done this before and i dont know how long id like to rent it out.

Why are you trying to cause yourself complications ? Get vacant possession of the property and move in. If after you do that you want to rent out then do it completely independently to the house purchase.

djimi

D3PO wrote: »

Why are you trying to cause yourself complications ? Get vacant possession of the property and move in. If after you do that you want to rent out then do it completely independently to the house purchase.

Agreed. The situation with the tenant sounds like it is over complicating matters. The tenant has already been given notice to vacate so dont mess him around; take vacant possession, get yourself sorted and then look to re-let if you wish to do so.

cursai

D3PO wrote: »

Why are you trying to cause yourself complications ? Get vacant possession of the property and move in. If after you do that you want to rent out then do it completely independently to the house purchase.

It does sound like the easiest and safest solution. Hate the idea of looking for a new tenant though.

D3PO

cursai wrote: »

It does sound like the easiest and safest solution. Hate the idea of looking for a new tenant though.

Finding a tenant isn't difficult. If its nice accommodation, correctly priced for the market its in and in a decent location you will let it in no time.

cursai

Thanks all.
Will let the person continue to leave. Shame though. The neighbors are friendly with him and hes kept the place in great condition.

Mrs OBumble

Have you talked to him about the possibility of staying, but taking a short holiday around signing date?

Is he fussed about his Part 4 rights - maybe he'd be happy to rend a room in your home with no rights but no requirement to give 56 (whatever) days notice if he leaves in future?

Does vacant posession mean totally empty and with no one else having keys? What if the "previous owner" happened to have "abandoned" some stuff there?


IMHO a previous tenant who is know to pay on time and not have any ASB issues and to have a relationship with the neighbourhood is worth his weight in gold.

D3PO

Mrs OBumble wrote: »

Have you talked to him about the possibility of staying, but taking a short holiday around signing date?

Yeah that's a good idea try and create a fraudulent situation with somebody you don't know to put one over on the bank.

Is he fussed about his Part 4 rights - maybe he'd be happy to rend a room in your home with no rights but no requirement to give 56 (whatever) days notice if he leaves in future?

Does vacant posession mean totally empty and with no one else having keys? What if the "previous owner" happened to have "abandoned" some stuff there?

Vacant possession means exactly what it says. Vacant

IMHO a previous tenant who is know to pay on time and not have any ASB issues and to have a relationship with the neighbourhood is worth his weight in gold.

There are plenty of tenants like that. Putting yourself in a ridiculous situation to keep a tenant makes no sense at all.

cursai

Mrs OBumble wrote: »

Have you talked to him about the possibility of staying, but taking a short holiday around signing date?

Is he fussed about his Part 4 rights - maybe he'd be happy to rend a room in your home with no rights but no requirement to give 56 (whatever) days notice if he leaves in future?

Does vacant posession mean totally empty and with no one else having keys? What if the "previous owner" happened to have "abandoned" some stuff there?


IMHO a previous tenant who is know to pay on time and not have any ASB issues and to have a relationship with the neighbourhood is worth his weight in gold.

Thats what i was thinking. But on the other hand i don't want to jeopardise my situation with the bank. The safest thing might be just to start afresh with a new tenant.
Either way ill speak to my solicitor about it.

Mrs OBumble

D3PO wrote: »

There are plenty of tenants like that. Putting yourself in a ridiculous situation to keep a tenant makes no sense at all.

Let's be quite clear, I am not suggesting fraud. I am suggesting finding a relationship-management based way forward, that might well benefit both the new owner and the ex-tenant while being legal.

As I understand it, sales that include specified furniture and fittings are quite common. Hardly "vacant". I've also heard stories of people buying houses that were empty - and later discovering the attic full of stuff.

And while there are plenty of good tenants, the work required to find one - discerning them from the poor-payers, dudes with attitude (great for neighbourhood relations), amateur lawyers, folks who have to give 56 days notice where they are so don't want to start paying yet, etc - is not trivial.

While many people here see Part 4 as conferring significant benefits on tenants, others of us see it as more of a burden which we would happily do without.