Tenancy

Dtp1979

I’m looking at buying a house. In the add it says the house is subject to a tenancy of X amount per year. Does this mean if I buy this house that there’s tenants living in it and I’d be the new landlord and would have to get them to leave if I wanted to live there myself?

The Student

Dtp1979 wrote: »

I’m looking at buying a house. In the add it says the house is subject to a tenancy of X amount per year. Does this mean if I buy this house that there’s tenants living in it and I’d be the new landlord and would have to get them to leave if I wanted to live there myself?

If you are buying with mortgage bank will require vacant possession.

Dtp1979

The Student wrote: »

If you are buying with mortgage bank will require vacant possession.

And can it be sold with tenants in situ? Is that allowed under certain conditions?

Samuel T. Cogley

Dtp1979 wrote: »

And can it be sold with tenants in situ? Is that allowed under certain conditions?

Yes to a cash buyer.

Fol20

Samuel T. Cogley wrote: »

Yes to a cash buyer.

Or a btl mortgage

Dtp1979

Well the house I’m after is for me to live in. So if I buy there could be terms that tenants stay until there contract or whatever is up?

GGTrek

Dtp1979 wrote: »

Well the house I’m after is for me to live in. So if I buy there could be terms that tenants stay until there contract or whatever is up?

OMG, please ask your solicitor to instruct the seller's solicitor to issue a termination notice for sale of the property to the tenant since you need it as your Principal Private Residence and the bank will not lend you the money for the PPR mortgage you have. As simple as this :D (this is a malignant smile).
In this way you will shift the huge burden of terminating a tenancy to the seller and you will not run into problems with your mortgage.

Klonker

Dtp1979 wrote: »

I’m looking at buying a house. In the add it says the house is subject to a tenancy of X amount per year. Does this mean if I buy this house that there’s tenants living in it and I’d be the new landlord and would have to get them to leave if I wanted to live there myself?

Is the house in a rent control zone? If so I'd assume the ad means this is the current rent you could charge if going to rent out the place. I'd call the agent to confirm.

Grolschevik

Does the OP not mean that they're looking at buying a leasehold rather than a freehold property? Not that there are tenants in situ?

dennyk

"House is subject to a tenancy" probably means there is a sitting tenant. A property can be sold with an existing tenancy, and the tenancy will survive the sale under its existing terms, whether it's currently under a fixed term lease or just a Part 4 or Further Part 4 tenancy. If under a fixed term lease, the tenancy cannot be ended even for a valid reason under Part 4 until the lease term is over, so the new owner could not terminate a fixed term tenancy because they need to move into the property. Under a Part 4 tenancy with no fixed term lease in place, the tenancy could be terminated because the new owner wants to move in, but the statutory notice period would still apply, so the new owner won't be able to take possession for some time.

That said, owner-occupier mortgages will generally not allow drawdown without vacant possession, so a borrower would be unable to complete the purchase if there's a sitting tenant (even if the buyer plans to end the tenancy immediately after the sale). A buy-to-let mortgage would, but those generally have less favourable terms and rates and are harder to qualify for than a standard homeowner's mortgage. Even if the current owner is planning to end the tenancy before closing, there's still the risk of the tenant overholding and preventing the sale from going through, so you may be doing a lot of negotiation and paperwork for nothing in the end. And even in a cash sale, there is the same risk that the sitting tenant will overhold following the sale and it could take months or years and a lot of hassle and money to get them out. I'd avoid any property with a sitting tenant at all unless you are actually buying to let (and you've properly done your own vetting of the tenant in situ as well).

Dtp1979

Yea that’s my biggest fear, that I buy the house and stick with tenants that won’t move. I’ll call the agents tomorrow and see what the story is

4ensic15

In some of those situations, it is impossible to know what the original lease was, how long it was for or how long the tenants have been there. It is quite common in bank/repossession sales. It can be very difficult to register the new tenancy as the rent may not be known, nor the names of the tenants. Without registering the tenancy an overholding dispute can't be commenced. It can be impossible to prove the rent is not being paid.