Buying a property with the existing tenants
In most cases, buying a property involves the exchange of the asset from the current resident to you – the new owner, but this isn’t always what will happen. What could happen is that the property you purchase is one in which tenants currently live because the current owner is a landlord who rents it out? In the event that you are buying a property which has this status, there are a number of things to think about.
If you yourself are hoping to become a landlord as a result of your property purchase, it could be beneficial to buy a property in which the tenants are currently fairly secure. If you want to live in the property you are purchasing, however, the process could be made much more complicated by the presence of tenants there at the moment. So, what’s the difference between a property purchase from an owner-occupier and a property purchase from an owner who rents out the home to tenants? This article will explore this question in more detail.
Your own goals
Depending on your circumstances, buying a property which is currently tenanted could be a useful move. If you are hoping to become a buy to let landlord, for example, a property which contains a tenant at the moment could be perfect. You may find that listings on websites such as Rightmove advertise the property as a place which currently has tenants, which is useful in this scenario.
If you’re planning to live in the property you’re purchasing, however, it could cause problems if it’s currently tenanted. That’s because there are complicated rules and procedures involved in asking sitting tenants to move out – and if you don’t do it correctly, you may well end up buying a property which you can’t live in for a while because the correct procedures have not been followed.
When you purchase a property, you’re likely to come across a concept called “vacant possession”. This is a way of referring to the fact that, upon purchasing, you are entitled to have the property entirely to yourself – and that it will not come with people currently living in it. If you buy a property with this designation, you’ll be legally entitled to move in on the specified competition date without the problem of anyone else living there.
This also means is that you won’t have to deal with the problem of any tenants or other occupants who might hold up the process. Your solicitor should be able to ascertain whether or not a property comes with vacation possession – if it does not, you’ll have the opportunity to cancel the transaction prior to the exchange of contracts.
Buying a tenanted home
It’s not out of the question, however, that you might come across a property which is not offered with vacant possession but which you want to buy in your own right and live in as your own home. This scenario is somewhat more complicated, and it could involve protracted legal progress that you need to be aware of before you immerse yourself in it.
However, the problem could be solved at the source. It could be, for example, that the person from whom you are buying is able to evict their tenants before the purchase happens. In this instance, it will normally be established by your solicitor that this will take place prior to completion of the sale occurring, and you will be able to move in as expected.
In the event that your new home is not sold with vacant possession, however, you may quickly find that it becomes something of a nightmare to sort out. First off, even looking at the property to inspect it prior to putting in an offer could be a problem. This is because tenants are required to be given a certain amount of notice before people nominated by the landlord come over. Some tenants may choose to refuse access even when notice is given on the grounds that the landlord is not offering “quiet enjoyment” of the property.
If, however, you have your heart set on purchasing such a property, it’s well worth remembering that tenants are permitted to stay in a property until such a time that the established legal procedure for evicting them has been followed. In the event that the landlord from whom you are buying doesn’t follow the correct procedures to evict their tenant, the tenant does not necessarily have to leave the property. In this instance, you could find yourself stuck with the responsibility of moving on a tenant just so that you can live in the house that you have rightfully purchased.
The best course of action
Fundamentally, the best course of action for someone who is looking to purchase a tenanted property is to avoid signing and exchanging the contract until it has been conclusively confirmed that the tenant in question is out of the property and has no intention of returning. That way, there’s no risk that you’ll suddenly be burdened with the responsibility of removing them without having signed up to do so.
If you’re in the process of selling your current home and purchasing a new one, the idea of moving into a place which is currently occupied by tenants will most likely be off-putting. Unless you’re purchasing the property with the intention of letting it out, buying a home which contains existing tenants can be tricky. However, by following the advice outlined here – such as using Rightmove or similar websites to filter out inappropriate options and ensuring that you become familiar with tenants’ rights – you can make sure your home purchasing process is free from this particular problem.
Are you struggling to sell your current home? If so, National Property Trade may be able to help – so why not find out more today using this link?