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  • Buy-to-Let

    Buying a BTL with long term sitting tenants

    Morning all,

    I've looked through previous posts and have found differing views on purchasing a BTL with long term sitting tenants.

    I'm doing the due diligence on a BTL property which has good potential however it has an elderly couple in residence (70 and 75) for the last 20+ years. I'm working with the agent to determine what type of tenancy agreement they have as I have heard one story that even if they have a new AST, if they previously had the old Assured Tenancy or even a Rent Act Tenancy, they are potentially very difficult to move on.

    As they are elderly (he is 70 and currently still working), I'm also nervous on how they would continue to pay the rent, well into retirement using their pension etc but not sure whether this is a question that could be asked directly in this age of privacy rules?  I understand that they've taken very good care of the property over the years, although not most peoples taste in decor.

    I would appreciate any constructive advise that you may have from your knowledge and experiences.

    thanks

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    Andrew, 

    If the tenants went into occupation prior to 15th January 1989 then they will, more than likely, have a protected tenancy (Rent Act 1977). There may be other factors to consider, such as employment with the landlord, so your lawyer needs to find out exactly how the original tenancy arose. Although there may be AST paperwork, people do sometimes end up with agreements that are not valid when it comes to enforcement, especially if the occupation predates the paperwork. 

    I’d look at the tenants’ payment history; you could politely enquire about ongoing payments, but if they’ve historically been good this may be a guide to the future.
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    Thanks Graham.

    I've just had an update from the EA who says that they have a recent AST agreement from a Letting Agent, which is now rolling over, as owner stopped managing themselves around 2 years ago, but appreciate your point on my solicitor checking it fully and will do so.

    Andrew

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    Hi Andrew
    I have no expertise in this area but seem to remember reading that if someone dies with some tenancy types it can be passed on to another family member - might be something worth checking when your solicitor reviews paperwork. 
    Hope it goes well
    Emma
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    Don't forget the French man buying in Paris. Thought he would make money and agreed to a deal over 30 yrs. He died at 77 and the tenant went on until 120. Cost him thousands and never got to live in the property.

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    Closer to home

    According to PHE’s report on recent trends in life expectancy at older ages: men can now expect to live for a further 19 years at age 65, 12 years at 75, 6 years at 85 and 3 years at 95. women can expect to live for a further 21 years at age 65, 13 years at 75, 7 years at 85, and 3 years at 95.

    UK life expectancy increases for those in older cohorts due to the "selection effect" - in effect each birthday attained confers 7 or 8 months of further life expectancy once you reach age 65.


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