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  • Buy-to-Let

    Struggling to complete on auction purchase!!!

    Morning all,

    I am in desperate need of help!!! 

    This topic covers so many threads... but let's start here... 

    I have bought a property at auction, paid large deposit, and now can't complete due to tenants not having been issued a right to rent booklet and EPC "prior to moving in" 

    It is a HMO. Gas cert and EPC etc is displayed on notice board but this is not correct. The problem is it now seems you can't evict tenants unless they have had the EPC and Right to Rent booklet prior to moving in. 

    And before you say it... Yes I had all the conveyancing done before purchase and yes I had mortgage offer in place. Sadly this didn't come up with the first two conveyancers. It has only come up now. 

    Anyway, I'm sure others have purchased property with sitting tenants and been unable to evidence they were issued with a right to rent and EPC prior to moving in. So my question is.... Is there anyway to proceed before I lose a whole heap of money?

    Indemnity insurance?
    Eviction cover? 
    Different conveyancer?
    Reduce amount of loan? Would that reduce lenders risks? 

    Any ideas about raising funds ASAP to do cash purchase?
    Bridging may not be quick enough.... and solicitor wouldn't accept credit cards... or loan shark money ?? !!!

    Thanks all
    Judith
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    Hi Judith

    When is completion due? There are a couple of  bridging companies that I know who can turn it around in 48hours however as you know you’ll be paying circa 1% a month till you can refinance. 

    If you already have a mortgage offer why can’t you complete and then deal with evicting the tenants later?
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    Well this is not actually right. The guide can be given any time, not just before move in. The EPC is less certain but can probably be given at any stage. The gas safety is the most important but if it was on a board all the time should be fine.

    However, given the importance of your question it seems to me that you should talk to your conveyancing solicitors about some proper legal advice
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    David Smith
    Landlord & Tenant Solicitor
    Anthony Gold Solicitors

    Find me on LinkedIn: uk.linkedin.com/in/dsnsmith

    All opinions are my own and do not reflect those of my firm. No comment made should be taken as legal advice and you should consult a solicitor or other legal professional for advice on your specific situation.

    I am not sure that even just having the Gas Safety certificate displayed on a board is enough. See below the extract from the Regulations....


    This contravened regulation 36 (6) Gas Safety Regulations 1998, which states: ‘a copy of the last record made in respect of each appliance or flue is given to any new tenant of the premises to which the record relates before that tenant occupies those premises save that, in respect of a tenant whose right to occupy those premises is for a period not exceeding 28 days, a copy of the record may instead be prominently displayed within those premises’.

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    When you say this is something that has come up now, how have you discovered they definitely were NOT served these documents prior - has the previous landlord informed you? 

    I would serve both now and ask them to sign to confirm receipt of both, then this can then be served as evidence in the future, if required. 

    In my opinion, a conveyancer would not look into the tenancy set up too deeply unless you specifically asked them to check whether certain documents had been served on the tenant.

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    Well, you can technically still buy the property with all those problems in place.
    Though I am guessing the mortgage lender does not want to?

    I think you are the best place in talking to an eviction company, to see how all that can be resolved.
    Then put that to your broker to discuss with your lender, to ensure that it can move forward to completion.

    If the lender does not budge then you could look at more relaxed lending options, such as Short-Term Bridging Finance.
    Once purchased with that, you can then move to resolve the issue and move onto Term Finance.

    Your Broker and Conveyancer should be able to come up with a plan to get you over the line.

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    _________________________________________________________________________


    My posts are not financial advice, just a rambling guy passing time on a coffee break.
    The team at Bespoke Finance offers advice, including Limited Company Buy-to-Let , HMO Conversion and Cheap Life Insurance.

    _________________________________________________________________________


    Hi Judith

    Sorry to hear about your situation; this highlights the pitfalls for the unwary and the problems caused by the Government's desire to do away with PRS.

    As Adam said, the property can still be purchased; the issue you have highlighted simply mean that you cannot serve a s21 notice. This is not necessarily the end of the world; if yo  a good tenant and want the house as an investment then you may not be overly worried about s21.  However, it is a useful tool in a landlord's armoury (until it gets taken away from us) and lenders may be worried.

    I don't think a conveyancer would necessarily check for such compliance issues.  I am a valuer and it is usually the valuer who flags it to the solicitor, so I assume you did not take advice prior to the auction.  I would query though what conveyancing you had done before the auction.  The contract is generally presented as a fait accompli.  Your solicitor will probably have read the contract, but not done any conveyancing as such.

    Indemnity insurance will not work as you are buying a known issue.

    I do not know what eviction cove is; again you are buying something that is known.

    What will a different conveyancer do?  If there is no compliance by the vendor, your conveyancer cannot sort this.  Just wondering why you have already had two conveyancers!

    As for a suggestion, have you tried Together Finance?  They may be able to help.


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    Trying to by an auction property with a regular mortgage is asking for trouble in my opinion. You sure have rolled the dice !
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