I have remortgaged a property and have available funds to purchase another btl. I’ve found a suitable property and can get it at a good price, but there is a tenant in situ whom I believe is on a AST on a monthly rolling contract. She’s paying really cheap rent nowhere near current value rate. In fact her current rent would barely cover the interest onlu mortgage. She’s lived in the property for 15 years, and the landlords formed a friendship with her and has never put her rent up. She’s around £600 less a month. She has two older kids and a dog. She works. However I doubt she’d pass affordability checks. Am I right in thinking If she’s on a rolling ast I can increase the rent to market value and if she can’t pass the checks I can serve notice? I’ve asked for the agreement etc to be sent before I make an official offer: advice appreciated in advance!
Just walk away, this will be a nightmare.
this question has been asked and replied to in a previous post
Even with their standard ast agreement?
Could you post a link to that? I’ve searched but can’t see much. Thanks In advance
Responses above should save you the hassle of reading through the previous posts. Walk away.
I am not going to search sorry . i have enough to do
My reply is still awaiting moderation, so I suggest you google “26 questions to ask when buying a property with a tenant in situ”. You should also check that the tenant doesnt have a regulated or fully assured tenancy, whatever the paperwork says.
Do full due diligence. In particular cgeck that she doesnt have a regulated or full assured tenancy.
Buy the property but have the tenant served notice and buy as vacant possession. There are so many people who need a home at the moment. I have twice had bad experiences with tenants who have been “friends” with their landlord or letting agent. If they won’t sell to you it means that whatever is going on is weighted to the tenant. Also, as she has been there 15 years everything is allowed to be absolutely knackered so budget replacing EVERYTHING as part of the purchase price. The tenant could serve notice to leave once the sale completes and you could be stuck with a renovation.
Thanks so much for the advice !
She has a standard ast tenancy agreement. Looks like it was downloaded offline, not particularly detailed…
Really appreciate the advice, thank you
Walk away, you are walking into a legal minefield.
In your description, get the current landlord to serve notice. Only buy on vacant occupation. It the tenant wishes to rent from you I suggest do all the necessary credit checks vv the new rent.
You will also have to undertake a number of inspections, gas, boiler, water tanks and pipes for legionnaires, building, electrical, plus all the admin for a new tenant.
Join RNLA and download their AST, ensure you add any specific clauses, maximum occupiers, water gutters or anything else are LL or tenant responsibility.
Ensure you maintain property inspections between 2-4 in first year, until you are happy that the tenant is looking after the place. Even then annual checks should be the norm.
You may need a rewire or at least upgrade the consumer box to the latest regs.
The higher the standard of refit the higher the rental opportunity.
If you cannot do the above walk away.
You need to find out exactly when she moved in from the tenant. If it was prior to February 1997 then it doesn’t matter what tenancy agreement she has signed now, she would still have a more protected form of tenure.
The vendor sounds like a decent person. You sound like the type of landlord that gives landlords a bad name. Looking to evict a woman with two kids just to make money for yourself. Shame on you.
Why would you write that? Have you actually read my posts?
David I never used to believe that there"is one born every minute" But after some of the coments on the landlords forum I realise it is true . . It is either jelousy, a tenant with a sad life ,or has been evicted
If you want to be safe buy with vacant possession.
I have bought several properties with tenants in situ and never had a problem BUT you and your solicitor need to check the AST and maybe learn a little about the tenant.
another option is to issue the Tenant a new AST just before exchange of contracts takes place.
If its a good buy then proceed with due diligence. If you’re not too bothered then buy elsewhere
good luck
What do I need to do as selling property with tenants in situ giving them the option to stay in if new landlord wants them- do I cancel the AST? Does new landlord take care of it?
Not done this before any guidance appreciated !!