Special Termination Agreement with Tenants

ChewBerecca

Just wondering if anyone has had any experience with buying a house with tenants in situ (notice given before house went on the market 3 months ago).

Background, first time buyers, everything in order and ready to sign once the solicitor gets confirmation the tenants are gone. Enquiry has already been sent asking when the tenants will be leaving.

Estate agent has been very pushy and condescending recently after we stated our solicitor, along with family solicitors, refuse to allow clients to sign until tenants have vacated. Agent has now come back with detail (for the first time since we viewed the property despite us asking) of the "notice agreement" between the landlord and the tenants which is that they have agreed to a months notice once contracts have been exchanged.

Just wondering if anyone has ever encountered this "one month after exchanging" notice period? Or is the agent speaking out of turn (to be polite)?

We will obviously be following our legal advice, but curious if this is some common rental market carry on.

Already been gazzumped this year so mentally drained with the process of buying our first home.

First thing I would say is, be guided by your solicitor’s advice.

A tenant cannot sign away their statutory rights in relation to a tenancy. They can sign the piece of paper given to them by the EA/seller, then completely ignore it if they do not want to move out when the time comes.

You are better off waiting for vacant possession, if the seller is struggling to get the tenant out, they will be more than happy to pass that problem on to you when you sign the contract.

The longer you insist on vacant possession, the more incentive there is for them to get the tenant out. Don’t worry about being gazumped, no one else will buy it with a sitting tenant.

ChewBerecca

Dav010 wrote: »

A tenant cannot sign away their statutory rights in relation to a tenancy. They can sign the piece of paper given to them by the EA/seller, then completely ignore it if they do not want to move out when the time comes.

That's our concern. We know (as tenants ourselves) what legal notice should look like. Fair enough they may be ok with having one months notice. But they may also demand their proper notice which they are fully entitled to.

We just cant afford (mentally) to wait another 3 months minimum to close as we thought 3 months was enough time for both parties who are not in chains. It also means we will have to get the bank back out for another valuation.

The agent seems to think that this arrangement is normal, which we think is bonkers but open to being contradicted.

ChewBerecca

ChewBerecca wrote: »

That's our concern. We know (as tenants ourselves) what legal notice should look like. Fair enough they may be ok with having one months notice. But they may also demand their proper notice which they are fully entitled to.

We just cant afford (mentally) to wait another 3 months minimum to close as we thought 3 months was enough time for both parties who are not in chains. It also means we will have to get the bank back out for another valuation.

The agent seems to think that this arrangement is normal, which we think is bonkers but open to being contradicted.

It is normal for the seller to want the buyer to sign the contracts while the tenant is still there, but I suspect it is not normal for the buyer to agree to it. Discuss this with your solicitor, if you are not in a position to wait for a protracted period, get your solicitor to tell the buyer that if they can’t obtain vacant possession soon, then you will not wait. Remember, the Seller will have given the tenant a notice to terminate already, so they must not be confident that the tenant will be out soon.

No matter how stressed you are now, you would be infinitely more if you draw down your mortgage to buy and have to make repayments while a tenant refuses to move out. It could take a year to evict them.

A bank told me I couldn't draw down a mortgage for a house unless I was buying it vacant. I wouldn't take the risk of the tenants overstaying.
Tell the seller to give them notice, let them move out then purchase.

Cathmandooo

Your bank won't let you draw down the mortgage without vacant possession. It won't happen, far too risky for you and the bank.

the_syco

ChewBerecca wrote: »

Agent has now come back with detail (for the first time since we viewed the property despite us asking) of the "notice agreement" between the landlord and the tenants which is that they have agreed to a months notice once contracts have been exchanged.

Are they having a laugh? They are not even going to try to evict the tenants until after the contracts are signed? Oh, lawl. In other words, once contracts are signed, it's no longer their problem, they'll get their cut, and the tenants that they cannot evict are no longer their problem.

I'd say you should walk away from this one!

ChewBerecca

Thanks everyone for the replies.

We're well aware that the bank wont let us drawdown until the house is vacant, and we will be following our solicitors advice, if the vendors solicitor gets back to their enquiries.

Seems to be that the vendor is pulling a fast one and trying to keep rent payments until they close.

dennyk

Yep; listen to your solicitor first and foremost. Your bank isn't going to let you draw down that mortgage until the tenants are out in any case. The agent likely just wants their commission ASAP so they can move along to the next big sale; don't rely on them to give you correct advice.