Buying an apartment with existing tenants for use as owner occupier

Bob24

I understand that if you buy an apartment with existing tenants the lease will be transferred to the new owner as is.

My question is: will it always be possible to easily end that tenancy agreement (with a notice period of required) provided the new owner wants to use it as a primary residence, or are there things to look for which could possibly prevent from ending it?

runawaybishop

Bob24 wrote: »

I understand that if you buy an apartment with existing tenants the lease will be transferred to the new owner as is.

My question is: will it always be possible to easily end that tenancy agreement (with a notice period of required) provided the new owner wants to use it as a primary residence, or are there things to look for which could possibly prevent from ending it?

If its a fixed lease with no exit clause then ending it early isn't possible.

srsly78

The tenants refusing to move out could prevent it for a year or more. You need to distinguish between what's legal and what may happen in reality.

Baby01032012

I assume you will be buying without mortgage...as you know all lenders insist on vacant possession
Why has the current owner not given notice....selling is a valid reason...most buyers would expect vacant possession unless buying as investment - There may be a dispute for overholding or possible non payment of rent. If you are buying with tenant in situ you would want to satisfy yourself (via landlord, lease, meeting tenants, proof of payment, RTB etc) that there is non of the aforementioned, also check with RTB that no case has been lodged for that address. 
You dont know the tenants or their history or do we so we cant comment on what could prevent you from ending it other than speculate as to tenant overholding/not paying rent or their potential to do that once you take ownership and give them notice, thats why you and your solicitor should insist on vacant possession. Between notice, lodging complaint with RTB, adjudication Courts., that could take 2 years to get them out. Also depending how long they are there they could have obtained rights to property.

o1s1n

Had an issue with this myself a couple of year ago.

Sold my house and bought an apartment (which had a tenant in situ)

The house sale and the apartment purchase went through pretty much at the same time in December.

The tenant in the apartment agreed to leave early, but not until the end of January in the following year.

Ended up having to find alternative accommodation for a little over a month while waiting for the tenant to leave. (my parents sitting room floor! :pac:)

We were told we were actually very lucky the tenant agreed and they could have potentially stayed out the end of their lease (in which case I wouldn't have bought the apartment to begin with)

Marcusm

Bob24 wrote: »

I understand that if you buy an apartment with existing tenants the lease will be transferred to the new owner as is.

My question is: will it always be possible to easily end that tenancy agreement (with a notice period of required) provided the new owner wants to use it as a primary residence, or are there things to look for which could possibly prevent from ending it?

If you're buying with an owner/occupier mortgage, the seller will have to turf the tenants out before you'll be able to purchase.

The_Conductor

Is the tenant on Part IV or a fixed term lease?

Bob24

Baby01032012 wrote: »

I assume you will be buying without mortgage...as you know all lenders insist on vacant possession
Why has the current owner not given notice....selling is a valid reason...most buyers would expect vacant possession unless buying as investment - There may be a dispute for overholding or possible non payment of rent. If you are buying with tenant in situ you would want to satisfy yourself (via landlord, lease, meeting tenants, proof of payment, RTB etc) that there is non of the aforementioned, also check with RTB that no case has been lodged for that address. 
You dont know the tenants or their history or do we so we cant comment on what could prevent you from ending it other than speculate as to tenant overholding/not paying rent or their potential to do that once you take ownership and give them notice, thats why you and your solicitor should insist on vacant possession. Between notice, lodging complaint with RTB, adjudication Courts., that could take 2 years to get them out. Also depending how long they are there they could have obtained rights to property.

Thanks I was actually not aware of this and I am buying with a mortgage. So we are saying anything with an existing tenancy agreement is off the table?

I do see quite many properties for sale which are in this situation. Does it mean they are only targeting cash investors who will want keep the tenancy agreement as is?

Bob24

The_Conductor wrote: »

Is the tenant on Part IV or a fixed term lease?

I don't have a specific place in mind yet. It's more a generic question to know if there is any point in looking at places which do have an existing tenancy agreement or if I should just ignore them.

Bob24

Marcusm wrote: »

If you're buying with an owner/occupier mortgage, the seller will have to turf the tenants out before you'll be able to purchase.

And is that a common ask as a buyer? The places I am looking at tend to attract a few bidders and go for higher than asking price. I assume if I made such request I am likely to be told to get lost? (assuming the seller has other people interested who are ok with the tenant).

Peregrinus

Bob24 wrote: »

I don't have a specific place in mind yet. It's more a generic question to know if there is any point in looking at places which do have an existing tenancy agreement or if I should just ignore them.

You should just ignore them. The target market for these sales is people looking to purchase an investment property.

The_Conductor

Peregrinus wrote: »

You should just ignore them. The target market for these sales is people looking to purchase an investment property.

Not really any longer- investors are not interested in tenanted properties- as this ties their hands and means, if they're in an RPZ, that the tenant cannot be charged market rates.

Pretty much any prospective buyer- wants vacant possession.

Peregrinus

So why would someone put an apartment on the market with a sitting tenant in it, and who do they expect will buy it?

The_Conductor

Peregrinus wrote: »

So why would someone put an apartment on the market with a sitting tenant in it, and who do they expect will buy it?

A receiver who has over-holding tenants who they can't get rid of?
A landlord- who is testing the market?

I honestly don't think any prospective seller could possibly have an expectation of selling a residential dwelling- at anything other than a massive write-down on the open market selling price- if it has a sitting tenant- and most sellers, contrary to popular opinion- are in fact rational creatures- and will try to maximise their potential gain- and sell vacant...........

The fact that you can't mortgage a property with a sitting tenant- of course- is to the fore.........