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I've agreed a sale of a buy to let and gave my tenant notice to quit and be out at the end of August.
The council have told her to sit in the house until I evict her and all the indications I am getting are that she will not move out on the notice date.
I've prepared Court papers ready to send if that should happen.
However, I am now quite worried that the sale will fall through. I know this is a long shot but if I lose the sale can I take any action against the tenant for my losses? I'm thinking legal fees , further expenses to myself of keeping on the house until I do evict her plus any loss if I then can't sell at the same value.
I'm going to put in a county court claim for any unpaid rent after the end date. I am quite worried about this, mainly about losing the sale I have agreed and am in the process of the legals with.
No, you cannot take action against the tenant for the loss of your sale. The sale can fall through at any time for many reasons and landlords can end up with months of a void property because the tenant moved out then the sale fell through. The average time to sell a property at the moment is around 7 months, so landlord could potentially be left with 5 months void after tenants works out two months notice.This is why it is worthwhile considering selling with a tenant in situ.
Furthermore, you should always work with the tenant when selling imho.On the odd occasion I have sold a property, I have contacted my tenants and let them know that it may take a long time to sell so I am not going to serve notice until I have a completion date. I offer them a financial incentive to co-operate with viewings and to move out on the completion date. Bar none, they have all been happy to work in this fashion.If I were in your shoes, I would incentivise your tenant financially to leave otherwise you are facing a lost sale and a lot of hassle.
Vanessa Warwick Landlord and Co-Founder of PropertyTribes.com **If you have got value from Property Tribes, find out how you can support it in remaining a free to use community resource**
Absolutely agree Vanessa. I have used financial incentives many times to avoid the gauntlet of the courts and council recommending the tenant stays in situ.
Regardless of why you are choosing to evict a tenant it is often worth considering the cost of court action plus loss of rent, when notice is served to final departure, in addition to possible malicious damage from a disgruntled tenant being evicted and adding this all up in your head. This can amount to thousands of pounds then you can work with a number that is worth both parties terminating the relationship.
It is for this reason I have only been to court twice in thirty years (touch wood).
Landlord with 25 years’ experience in the property market and a specialist in tenant referencing, ID and credit screening. Creator of identity, credit and anti-money laundering system ValidID.co.uk
I agree with Vanessa.
As for rent... In my opinion it is better to use a rent protection scheme than chase tenants for money. I've watched fellow landlords rack up the costs chasing rent owed and ending up with nothing but losses.Just get the tenant to pay for the rent protection within the rental amount in future.
Agreeing to a sale without prior vacant possession is frankly imprudent and naïve.
It was after all Thatcher's 1988 Housing Act s5 which made it crystal clear that a landlord could only force the end of a tenancy....
""" 5 Security of tenure.
1) An assured tenancy cannot be brought to an end by the landlord except by—
(i) an order of the court for possession of the dwelling-house under section 7 or 21, and
(ii) the execution of the order,
"""etc etc etc....
Tenant has absolute legal right to remain until court PO expires & bailiffs/HCEO evict: Just as landlord has an absolute legal right to follow s8 or s21 eviction process
Hardly new news....
Thanks for the helpful advice.
To the artfullodger - I didn't set out to sell with vacant possession. The house was advertised with a sitting tenant and I had initially hoped to find a landlord who would take the tenant on. Things don't always work as planned and I've ended up with a buyer who wants to live in the house and who has asked for vacant possession.
Selling with a tenant is entirely legal and not uncommon. I purchased a student property in 2006, still run it, like that.
New owner needs to serve notice(s) compliant with s48 & s3, after purchase, for him to go from just "owner" to be "owner & landlord". Go ahead and sell asis.
I think this can very much depend upon who is buying the property. If someone for renting then probably happy with tenant in situ.However if for their own occupation then that's very different and should you have entered into a contract to offer vacant position upon completion and have exchanged contracts you will be in breach of that contract if still occupied upon completion..It does not matter what tenants agree or sign up for, you are always liable if unable to fulfil your contract. Never sell tenanted property as vacant possession unless it is vacant , regardless what other say as you are on risk.Failure to complete could cost you as much as having the property empty for several weeks and if others are involved in a chain that could run into many thousands as all parties will sue you.
Sorry to hear its been so problematic.
As Vanessa, theartfullodger and douglas say, its perfectly fine to sell a property with a tenant in place to another investor. It becomes a lot more difficult to sell a tenanted property to an owner-occupier however! Selling with tenants in place also means that you preserve your rental income (including to service any mortgage interest costs) and means that you're not taking on council tax costs either.
Feel free to reach out if it becomes difficult for you and you need to sell your property with tenants in place as that's exactly what we specialise in!
If you have not yet exchanged contracts then you have no liability to your buyer and can just defer the sale until you have VP, or sell to someone else with the tenant in place.
Trying to sell a tenanted house with expectation of VP does not really work as you cannot give any guarantees (as you have found out). It sounds like there is no market for the house with the tenant in place and a VP sale is best (I assume that your agent has been through this with you); if so, then go through the motions of evicting the tenant and pause the sale until you can be sure of VP.
Just also remember that the tenant may leave behind damage which needs to be repaired, so you may have a liability here, depending on what you have offered and what you have said in the pre-contract enquiries. If the tenant leaves the house full of rubbish, you will need to pay to get it removed, unless you are very clear with your buyer.
One issue with selling a house with a tenant is that the tenant is not necessarily on the same page as the landlord. You want best price asap. The tenant wants to keep a roof over their head for as long as they can. Sometimes never the twain shall meet!