UK Landlord Forum / Life

After several months of waiting around on a rather slow landlord to be in a position to sell, we finally exchanged last week and are due to complete on Friday.  Initially, he informed me the property would be empty on completion, but after a long process he informed me he hadn't given the tenant their 2 months notice and now said it would have to go ahead with the tenant in situ.  To keep things moving along I agreed to this.

I now understand that she is not on a contract, that she pays him cash in hand at the start of each month and he has not taken any deposit from her!

Firstly, I'd like to get the property insure, but direct line who insure my other property will only cover it if there's a tenancy agreement/contract in place - despite the fact she's been there 2 years with the previous landlord.  Can anyone recommend a company who will offer building (& ideally legal) insurance on a periodic tenancy?
Secondly, I'd like to have the tenant vacate the property so it can be renovated.  I'll try asking nicely first, but any advice on how to proceed with that?  I'm concerned even if she only stays her two months notice she won't want to hand over any rent for that period.

Many thanks!
~devs

I would be having a word with your solicitor, he should have covered all this off. every house I have bought and sold has a legal form which must be signed by everyone living in the property stating they will vacate on the day of completion , I cant understand how this has not been done?? if your seller has lied on this form and only told you at the eleventh hour I would walk away. I am on the flip side  of this and want to sell a property that has a tenant but doubt if I will get a buyer with them in residence. as you know they have no contract etc I would think its a very bad idea to complete the purchase without any legal standing. good luck

Hi thanks for the reply.

Initially the it was due to be vacant on possession, but I agreed to let the tenant stay on rather than wait another 2 months while notice was served. The landlord had previously backed out once and the purchase has taken ~6months.

So, for better or worse the tenant will be staying after completion.  I'm not totally against keeping the tenant, but I suspect they're not going to want to suddenly start doing things properly and sign a tenancy agreement and pay via direct debit etc.  It has certainly thrown a spanner in the works with respect to insurance as direct line require a 6+ month tenancy agreement.

Devs,

why has the current owner pulled out from the sale before ? I would guess he knows he cant get the tenant out perhaps and no one else is willing to take on the bag of worms?

unless you are getting the property for at least 30k under its real value  I would walk away and forget about any legal and search costs but that's up to you as trying to get them out when you want may cost more than you think

im no expert but a lot of people on here have a vast amount of experience on this matter, I would take a while and read through the threads relating to having tenants with no contract and tenants with no secured deposit in the DPS scheme. I would think long and hard about this option for this reason, getting a tenant out of a property when all the correct legal forms , dps etc have been followed is not easy and can cost £££££££££££££££££££££ to get them out ( there are several threads on the first page of the forum on this) so getting a tenant with no contract at all to vacate a property will make this 100 times worse and cost a lot more in money time and hassle.
or option B is always possible shovel large plastic bag and a van and a quick trip to the local wood.

devs,

have a read of this lovely lot, basically if you don't inform the new tenant if the change of landlord you can be fined, hung drawn and quartered or worse!!   I would take specific legal advice on this issue before completion.

Check out Section 3 of the LTA 1985 - http://www.legislation.gov.uk/ukpga/1985/70 - "Duty to inform tenant of assignment of landlord's interest" - as well.

good luck

Please be careful about advice received from a blog (including my own)
Always do your own research.

So a few things to consider...
1. You are almost certainly going to be in breach of the terms of your mortgage (admittedly I cannot be certain on this point as I can't see your mortgage terms) as BTL mortgages require a written AST (sometimes even specifying 6 months only but that's daft) these days.  This is so the mortgagor can evict the tentant  in the event of default by the mortgagee and sell a vacant property - ground 2 for eviction for ASTs.  (It's  for this oversight alone you should shout at your solicitor).

2. If no deposit has been taken then there is no requirement to protect a deposit so don't sweat that one. Other than you are likely to be out of pocket if you evict.

3. You must inform the tenant of a new Landlord (it is technically a criminal not civil offence if you do not do so!) or be subject to £2,500 fine and court action staying a possesion order.

4. You should of course also serve in that notice the address at which you as the new Landlord can be contacted (lest ye fall foul of s48 Landlord and Tenant Act 1987)

5. Cash payments - use a rent book from the Landlord to avoid disputes.  Is/was this followed before by the current Landlord?...

6. Get as much documentation as you can from the current Landlord...rent book etc, dates, CP12s, fire assesment, legionnaires assesments inventory etc
6.a Key dates like when the tenant moved in MUST be established before you buy so you know what type of tenant you have.

7 The good news is that you can still use a Section 21 notice for possession.  However you cannot  use the "accelerated procedure" which means that you are guaranteed to make a court appearance at a hearing.  This is why paperwork will be come important in case questions are raised.  I would strongly recommend not pursuing a Section 8 route without an agreement.  You should be ok to evict through this process if you want to but you will have to explain to the judge why you don't have a written agreement....the only caveat I would add is that in my experience judges can go random if you are outside the normal process...

8. Add up costs and lost rent etc for evicting the tenant and tell the vendor to knock that much off the sale price.  He only disclosed late in the day there was no written agreement which is not on really..

9. Shout at your solicitor for not explaining all this to you

10. I'm afraid an insurance broker is your best bet to find a company that does not need a written agreement, although these days I think that will be hard to find.  Maybe you can get limited coverage until you can kick her out?  By the way the issue is not that's it a periodic tenancy (as you state in your post) but that it's a verbal agreement i.e. not written.  Note sometimes the mortgagor will require proof of insurance.

11. Have you spoken to the tenant? I once bought a place but contacted the tenant directly before the sale went through and they were over the moon to be able to stay in the house, get proper documentation and have some repairs done and cut out the letting agent.  You may have a negative impression of this person but they may well be willing to sign a new agreement with you (seems like they have paid the rent for two years?) If you do this then recognise a deposit might be hard to get out of her.
What's the level of renovation? Could it be done around her ...rent coming in (if she is paying) always better than no rent coming in.

11a.  Do not forget all the 'new' requirements before signing a tenancy agreement (post Oct 1 2015)

Best of luck.