UK Landlord Forum / Life

Hi all, hope we're gearing up to have a nice relaxing Xmas break ahead!

Some advice please: I understand this could be a potential minefield - Can anyone add to my check-list of what I've requested through our solicitors in case I've missed something? If I get all the answers I'm requesting for the below I think I'll be in the strongest possible position. So far all we got was a photocopy of 2/3 of the AST agreement with the front bit (containing thing such as effective date, deposit amount etc.) missing:

Hi,

Good to speak with you. As mentioned we need as much clarity on what we're taking on as possible with regards to the sitting tenants of the property, with whom we now intend to draw up a new AST contract once we complete the transaction to give both parties security given the change of ownership of the property (we are happy for this to be communicated with the seller and hence the tenants). However this means we need the following in order to accurately assess the level of risk in proceeding with the purchase at this stage:

1)  A complete AST agreement
2)  Full reference and credit checks (if these have not been done we would like them done - Please inform the seller's solicitor)
3)  As we understand the seller for some reason is not in possession of an inventory dating from when the tenants were given possession, we would like the seller to arrange for a new inventory documenting the condition of flooring, walls, painted surfaces, kitchen / bathroom, garden etc. to protect ourselves for when the tenants vacate in future. This has to be done to the appropriate standard as recommended by ARLA (http://www.arla.co.uk/news/april-2011/arla-advice-on-inventories-.aspx), it should include lots of detailed pictures of each room / surface / fittings included in the sale as well as outside pictures / the garden.
4)  Evidence showing how the tenant deposit is held and exact amount. We also of course need evidence that the deposit has been correctly protected.
5)  Evidence of tenant payment history: specifically how many times have the tenants have fallen into arrears if at all: We would like the detail in each case - when, by how much / how long, was any action taken to secure payment etc.
6)  Visibility on the current rent payment process: Is the property managed  by a third party, if so then please provide a copy of the contract between the seller and the agent to establish fees, level of service, longevity of the agreement etc.
7)  Copies of all current property certification such as gas safety, electrical inspections etc.


Thanks.

Bit worrying that the seller doesn't have an inventory but I guess it won't matter if they agree to having a new one done. Any thoughts welcome.

My first thought (comment, I guess) is that you intend to sign a new AST agreement with the current Tenant, but they have no obligation to do so. You, as the new Landlord, merely step into the shoes of the old Landlord and take everything on as was. Of course, if everyone agrees, it is possible to have the Tenants sign a new AST... but they might usually think "what's in it for me?" so good to have an answer for that query.

Regarding the deposit, you should also obtain agreement (once you've identified that it's held correctly) that there won't be any rigmarole in either transferring it to you... or, alternatively, returning it to the Tenants and them then paying you a new deposit which you can protect etc..

Ensure proper notice is served on the Tenants if you become the new Landlord, see LHA 1985, Section 3... summary offence not to do so.

The problem with getting an Inventory (and Schedule of Condition) done now is, well... it's exactly that... it's being done now. Sure, it tells you what is there now and what condition it is in now, but it doesn't help you understand if there has been damage (minor or extensive) since this current tenancy commenced, or whether things are missing. The risk you take, I expect.

Good luck.

Hi Hippogriff, thanks for the comments.

Yes I know they don't have to sign, I guess the assumption is they would want to as they're paying about 15% below market rate, but then that does in turn assume a level of intelligence on their part or that there isn't some other good reason not to sign. The best thing to do is go and see them I suppose to talk it through I suppose.

Good point on transfer of the deposit, although if I get the seller to refund the deposit I doubt the tenants would be legally obliged to to give me a new deposit - so how does one avoid the situation where the tenant has no deposit with me as the landlord in that situation?

Inventory - yep I get that, but in the absence of one at all it's the next best thing, at least the furnishings are all the tenant's and the place looks in good condition (albeit untidy when we viewed, hence why we ideally wanted vacant possession, but the seller refused to do this)