Property purchase with sitting tenant

Good afternoon
We’ve just purchased another property via an auction. It was being sold on behalf of a receiver. However I’d like a bit of advice: The property has a tenant. As it was being sold by a receiver no tenancy agreement is being handed over; no information on the deposit is being advised. We do not even know if one was ever paid! The rent has always been paid on time. However we need to gain vacant possession of the property asap as it has some pretty serious issues of damp throughout. We will need to completely tank the property and this cannot be done with a tenant in residence. Additionally I believe there is an issue with the boiler and possibly the electrics. No inspection was possible before purchase due to COVID. So as you can see it has some issues. We take possession in 12 days. So I will issue the letter of authority to the tenant to change the rent payments to my bank account but I’d like any advice you might be able to give regarding the other issues and how best to proceed on gaining vacant possession. As I believe the correct documents will not be in place / and making the property habitable will not be possible until an expensive refurbishment takes place I’d like a bit of input…thanks all in advance.

You may have some problems here. Its never advisable to buy a tenanted property without due diligence.

  • If the tenant first moved into the property before January 1989 then they will have a Rent Act tenancy and will be practically impossible to evict or to increase the rent.
  • If they first moved in after that date but before 27 February 1997 then they are likely to have an Assured Tenancy and you would not be able to evict without cause.
  • If they moved in after these dates and have an Assured Shorthold Tenancy then unless a valid gas safety certificate was in place before they moved in, no s21 notice can be served.
  • There are certain other documents that are required to be served at the start of the tenancy and no s21 notice can be served until they have first been served.
  • If a deposit was taken and not properly protected you would be liable as the new landlord for a penalty of up to 3x the value of the deposit for each tenancy they’ve had, including periodic tenancies
  • You will be liable for their health and safety and for the property disrepair regarding the damp and any other problems and if they don’t leave you can be prosecuted and/or face a penalty from the Council for breaching HHSRS and/or s11 repairing obligations.

There are many, many other potential issues you could face but you should start by finding out from the tenant themselves, (not just their tenancy agreement), when they first moved-in. Make sure you or your solicitor serve a s3/s48 notice for change of landlord or no rent is even payable.

Thanks David for your expansive reply. I am an experienced landlord and I do realise that there are a lot of potential pitfalls here. However the risk v reward was well worth the risk. The lady has lived there for 5 years. She was renting from her ex boyfriend up until now. At present there will be no valid gas cert or electric cert and I believe no deposit was paid. I would also imagine that no right to rent document was served either. Without a doubt a s21 would be impossible to serve. I think maybe an offer of cash to move out might be my one of my only options. Of course I could try and get a new cert for the gas and electric but this will be difficult (and potentially pointless) as the entire property needs tanking! Even with these in place and potentially setting up a new 6 month tenancy which would solve some of the issues it still doesn’t resolve the issue that the property in my opinion is uninhabitable due to the extensive damp. This absolutely cannot be remedied unless she moves out…

I hope you got the property for absolute pennies, mate

Yes I can see that even such a big risk as this can be worthwhile for the right price. I hope you can persuade her to move out for a reasonable sum. As you probably know, offers of money to move are usually best made through a solicitor so that the tenant can’t accuse you of harassment or trying to illegally evict her. If not then I would suggest verbal discussions only initially around the idea of a generous relocation package as the property needs serious work. Good luck.

Yes I completely agree here. The risk v reward is well over 300% so as you can imagine it’s worthwhile. Moving the tenant is a must and getting there will be somewhat tricky but all suggestions are very welcome. Ultimately I think it will come down to a financial settlement. I’m also just about to contact the local council whom I believe will condemn the apartment as it is currently. As I say I believe it’s uninhabitable at present due to the extensive damp issues. Have you or any other members come across an issue like this before - ie if the council do condemn it will they offer help? Help the tenant to move out; find a new place; offer some type of assistance? I think if i proactively engage the local council it should work favourably for me as I can show that I have only just taken ownership but it’s quite obvious that I cannot bring the property to the necessary standard without gaining vacant possession…Or alternatively do you think involving the council might backfire and cause me untold issues?

You cannot tell with the council, I would not trust them as far as could throw my car.

1 Like

Yes, beware of informing the Council. They won’t be on your side and will just serve you with urgent Improvement notices or worse and won’t care that you can’t get the tenant out. Neither will they necessarily help by offering them accommodation. Best to try to move the tenant on quietly if you can.

1 Like

Totally agree with David. The council WILL NOT work with you. You will open a can of worms.

Thanks David & Colin. I really appreciate your advice here. However do you not think that if I am proactive in bringing the council on board immediately on taking possession of the property and highlight the issues to them that they would not be willing to issue an emergency prohibition order? By doing so the onus will move onto them to accommodate the tenant? Pls appreciate that there are very serious issues of damp in the flat. Additionally as I’ve already said there won’t be a current gas or electric cert, so any legal route is a non runner! Yet this still doesn’t change the fact that the flat is non habitable as per the Housing Act 2004. On top of that I can’t be held responsible as I’m only just taking ownership. Furthermore I have quite a number of other properties within the same district council area and all are either new (5 years old or less) or have been completely renovated to new build standards. I normally renew absolutely everything on buying an older property from plumbing, electrics etc so that I have a problem free property for the long term. I only mention this so that I could easily demonstrate to the council that I am a very responsible landlord and the standard of accommodation I offer is always without fail excellent…hence not just trying it on here to gain possession!!! What do you think - still the wrong route?

Only one way to find out !!!

What they will do prosecute you, (or help the tenant to do it) for the property not being fit for human habitation and to claim and Rent Repayment Order. You will end up being forced to re-house the tenant at your own expense while you refurbish the property.

1 Like

Declan 2 you have our opinions .i can only go by what I know about councils They are down on Landlords EVERY time… They cannot house everyone who comes to them . They are strapped for cash. You may be right,… David and I may be right. It is your choice and money , let us know their response if you do get in contact with them. I am prepared to be shocked !

Just wondering, if the tenant doesn’t want to cooperate and go quietly will Declan then have no option but to involve the Council?

The tenant may want to stay even during renovations. Or move temp. out and wish to come back . Anything is possible. and unpredictable

1 Like

Thanks all for your invaluable input. Right now I’m sitting on the fence slightly unsure which route I should take. Naturally I want the fastest, easiest & least painful way forward. How to get to that end is hard to judge. I’ve spent quite a few hours over the weekend trying to find alternative accommodation for the tenant but this is not proving easy as she is a smoker with a dog and a bad credit reference…yet her rent payments are sissy’s on time…so every which way looks difficult.

I’m no expert but have dealing with a “protected” tenant with antisocial behaviour who will not allow access to inspect serious damp in order to repairs. You need a solicitor unfortunately.

She’s not a protected tenant so I would think you do have a right to give notice but first just make efforts to make flat safe for her. It’s your obligation.

You have to get a boiler check immediately & gain access to assess the property. See if she cooperates. If she doesn’t, then you have good reason to let her go.

If you do gain access & find there are issues explain to her & ask what her long term plans are. Maybe she would accept a resettlement deal. If not, I’m afraid you probably will have to pay for her to be temporarily moved so you can do works.

But if she doesn’t allow access that’s reason to evict. Try to look at this from her side. She will probably be scared of losing her home right now knowing that a new landlord will need to get her out to do works. It’s not easy to find accommodation especially which is affordable, accepts dogs etc.

We’ve had issues with a flat who leaseholder lets out to protected tenant. It’s been 2 years of hell as he is violent, menacing & has been stalking. As the flat is licensed by the council, they have an obligation to get leaseholder to comply. That’s you. In my case, they have been very helpful because I had cctv evidence of antisocial behaviour. The leaseholder has finally agreed to start eviction proceedings. This would not have happened without the councils help.

As for the damp. If this is caused by roof leaks exterior cracks etc, you must fix all that first. You must establish cause of damp & sort it. If it’s due to negligence of tenant, you need to work with them educating them about damp. Perhaps provide a written document with instructions for damp prevention such as no clothes drying on radiators, rooms need to be kept free of clutter up against walls etc. By a humidifier and take readings. You will need to pay some of her electric costs most likely. She’s under no obligation to use the dehumidifier but it’s a good idea to establish if she will be helpful or will block access & opportunities to fix the damp issues. If it’s down to not having adequate heating, (wall mounted) you are liable to out heating in. I wil NEVER EVER buy a property without assessing the tenancy agreements of others prior to purchase. And would never by with a sitting tenant. Complete nightmare.

I’m inclined to agree with Amy8. If she won’t leave then I think I would serve a s21 notice and then tackle the areas that would be top of the list on a Council Improvement Notice while she is still there. Speak to a specialist housing solicitor first. A firm such as JMW or Anthony Gold

Do not involve the council.

We have just had to rewire a house in advance of the new legislation to ensure the house is 18th edition compliant in April.
The tenant did not pack his stuff away despite knowing it was due a year from when contract commenced, a reminder at 4 months and then a month’s reminder.
All of this was documented in emails with written acknowledgement from the tenant.
TV, gaming stations left out etc…
Come the day of the rewire the electrician walked off site; he said he would not take liability.
I called the council and asked for them to intervene .

Best thing ever. They can be very helpful in such situations. Informed the tenant of the gravitas of the situation and that he would be served with a prohibition order and the rewire was going ahead.

It depends on your relationship with the council staff. Some are extremely, helpful some are not ( I have had a bad experience with one who was not au fait with HMO law and he came across as a racist misogynist)
We are registered with our council ( LAS) and I have found in hostile situations ( where you demonstrate responsibility) they can be very helpful.

They can see that you are trying but since Fitness for Human Habitation Act came into force the tenant can bypass the council and take direct legal action against you.

Having your efforts in writing and on record with the council will demonstrate responsibility on your behalf

Make sure everything is written ( either post or email) so there is a black and white trail

All that said Good luck

Rather you than me

2 Likes