Renting Home from Vendor Before Completion
Discussion
I'm splitting with my partner and our joint home together is under offer. We both found new places and we're working towards exchange with the expectation of completing just before Christmas, but I've got cold feet about my onward purchase and am considering pulling out and finding an alternative.
This would mean either disrupting the chain (and losing our sale), or potentially being without a home and needing something short-term.
I'm viewing a house later today which is vacant and, if it's right, I'm considering offering to rent it from the vendor from when my sale completes until the purchase goes through. A little googling suggests that while rare, this isn't impossible but isn't without it's risks - particularly for the vendor who could be left with a tenant who refuses to leave if the sale falls through.
The benefits for me are of course that I only have to move once, I save on moving/storage costs, and I don't have the stress of finding a short-term rental. For the vendor the benefit is that they're receiving rent for 3 or 4 months potentially while the sale progresses.
There are also potentially costs for the vendor with regard to gas safety certificates, landlord insurance, and so on.
My own situation is that I own two other properties which I rent out (although neither are local/practical for me to live in) so I'm familiar with being a landlord, and I'd be happy to offer to pay for said checks/insurances to make the process simple and even allow the contract to state that the landlord isn't responsible for maintaining white goods etc during the tenancy.
What else would you offer, or want to be offered if you were the vendor in this situation, to de-risk it or make you more comfortable with such a set up?
I'm well aware that the chances are they'll say no and I'll be browsing AirBnB before Christmas, but it can't hurt to try!?
This would mean either disrupting the chain (and losing our sale), or potentially being without a home and needing something short-term.
I'm viewing a house later today which is vacant and, if it's right, I'm considering offering to rent it from the vendor from when my sale completes until the purchase goes through. A little googling suggests that while rare, this isn't impossible but isn't without it's risks - particularly for the vendor who could be left with a tenant who refuses to leave if the sale falls through.
The benefits for me are of course that I only have to move once, I save on moving/storage costs, and I don't have the stress of finding a short-term rental. For the vendor the benefit is that they're receiving rent for 3 or 4 months potentially while the sale progresses.
There are also potentially costs for the vendor with regard to gas safety certificates, landlord insurance, and so on.
My own situation is that I own two other properties which I rent out (although neither are local/practical for me to live in) so I'm familiar with being a landlord, and I'd be happy to offer to pay for said checks/insurances to make the process simple and even allow the contract to state that the landlord isn't responsible for maintaining white goods etc during the tenancy.
What else would you offer, or want to be offered if you were the vendor in this situation, to de-risk it or make you more comfortable with such a set up?
I'm well aware that the chances are they'll say no and I'll be browsing AirBnB before Christmas, but it can't hurt to try!?
Setting my aside the question of risk, the main issue would be that the seller will become a landlord and therefore have certain legal obligations to meet.
Is the property up to a rentable standard? Has the boiler been inspected and serviced in the last 12 months and was the electrics tested and inspected in the last 5 years? How about the provision of smoke detectors and CO alarms? Are you planning to cover all the sellers costs as a landlord to bring the property up to the required standard and their letting agents fees?
Is the property up to a rentable standard? Has the boiler been inspected and serviced in the last 12 months and was the electrics tested and inspected in the last 5 years? How about the provision of smoke detectors and CO alarms? Are you planning to cover all the sellers costs as a landlord to bring the property up to the required standard and their letting agents fees?
After I split and sold that house, I couldn't find a place to complete in time, so not wanting to tie myself down for 12 months I rented AirBnB direct from the owners as a much lower cost (£1500 a month over the £4k they'd potentially get). It was a month to month agreement, so once I had a completion date the worst off I'd be was 1 months rent.
Put an ad up on the local FB groups asking for short term lets. I had about 10 people contact me fairly quickly!
You don't want this sale to fall through, so just camp somewhere else for a bit.
Put an ad up on the local FB groups asking for short term lets. I had about 10 people contact me fairly quickly!
You don't want this sale to fall through, so just camp somewhere else for a bit.
smokey mow said:
Setting my aside the question of risk, the main issue would be that the seller will become a landlord and therefore have certain legal obligations to meet.
Is the property up to a rentable standard? Has the boiler been inspected and serviced in the last 12 months and was the electrics tested and inspected in the last 5 years? How about the provision of smoke detectors and CO alarms? Are you planning to cover all the sellers costs as a landlord to bring the property up to the required standard and their letting agents fees?
It's a mid-90s build in decent condition - We're talking a few hundred quid for the relevant certificates and some smoke detectors. A fraction of the cost of a second removal/storage of my items and renting a holiday let for 2 months. So yes, I am suggesting I would pay those fees for the convenience of moving once.Is the property up to a rentable standard? Has the boiler been inspected and serviced in the last 12 months and was the electrics tested and inspected in the last 5 years? How about the provision of smoke detectors and CO alarms? Are you planning to cover all the sellers costs as a landlord to bring the property up to the required standard and their letting agents fees?
If you were the vendor, what would you want from a potential buyer in order to consider saying yes to the agreement?
An alternative might be staying at a holiday cottage until the sale completes. Should be plenty to choose from at this time of year and a deal to be done.
Not as cheap perhaps as renting the property you're going to buy, but an option. It's what we did for three months between houses.
Not as cheap perhaps as renting the property you're going to buy, but an option. It's what we did for three months between houses.
Baldchap said:
We will be renting out a property overseas for two months while the buyer's divorce is finalised, at which point he will buy, worst case apparently February.
We have a fairly cast iron contract in place and a 10% deposit already in our possession.
I'll let you know how it goes...
That sounds positive! Would you mind sharing details of the contract you used and what you had included to make sure it felt comfortable?We have a fairly cast iron contract in place and a 10% deposit already in our possession.
I'll let you know how it goes...
I did a similar thing, 4 years ago.
Wife and I seperated, and I found a house to buy, next door to my parents.
The sale was due to probate and I offered on it before it went to market. The vendors agreed the sale but this was subject to probate being completed.
I offered to move in, paying rent in the period between (they would have had to insure it etc whilst waiting if it were empty) and they agreed a reduced rent below market rate.
They did have to get a a gas certificate and the electrics signed off etc (and that meant a new conusmer unit which they paid for) and I signed a short term tenancy agreement.
The probate took 5 months to sort ot (Oct 20 - March 21) but it worked really well for me.
As an added bonus, stamp duty was waived at the time during Covid, so I saved a further £7.5k
Wife and I seperated, and I found a house to buy, next door to my parents.
The sale was due to probate and I offered on it before it went to market. The vendors agreed the sale but this was subject to probate being completed.
I offered to move in, paying rent in the period between (they would have had to insure it etc whilst waiting if it were empty) and they agreed a reduced rent below market rate.
They did have to get a a gas certificate and the electrics signed off etc (and that meant a new conusmer unit which they paid for) and I signed a short term tenancy agreement.
The probate took 5 months to sort ot (Oct 20 - March 21) but it worked really well for me.
As an added bonus, stamp duty was waived at the time during Covid, so I saved a further £7.5k
There is a slight complication in that the mortgage company will want vacant possession at the time of your purchase but it will be tenanted.
Now you are the tenant of course.
But the vendor will declare it is tenanted to your lawyer who will declare to the mortgage company.
I would suggest you talk to your conveyancer first to find a pragmatic solution ( which will exist ).
I did the opposite. I sold and occupied and this caused issues as the buyer did not have a buy to let mortgage which the lawyers in the end decided to ignore.
It can be solved but you do need to address it up front so it does not all get into a pickle
Now you are the tenant of course.
But the vendor will declare it is tenanted to your lawyer who will declare to the mortgage company.
I would suggest you talk to your conveyancer first to find a pragmatic solution ( which will exist ).
I did the opposite. I sold and occupied and this caused issues as the buyer did not have a buy to let mortgage which the lawyers in the end decided to ignore.
It can be solved but you do need to address it up front so it does not all get into a pickle
Mate of mine did something a bit similar, but he only 'hired space in the house for storage', thus avoiding any tenancy complications.
Personally if Iwas the seller, I would not want to allow the buyer anything until contracts had been exchanged.
Things can go wrong between exchange and completion, but there's some remedy for that.
Personally if Iwas the seller, I would not want to allow the buyer anything until contracts had been exchanged.
Things can go wrong between exchange and completion, but there's some remedy for that.
My wife did something similar when selling her mother's house.
The buyer was getting divorced and wanted to move in before completion.
Mrs CK had a rental agreement drawn up. She dropped the cost of the rent off the final price.
She tells me that her solicitor thought she was mad but the buyer was a senior property lawyer who knew what she was doing.
The buyer was getting divorced and wanted to move in before completion.
Mrs CK had a rental agreement drawn up. She dropped the cost of the rent off the final price.
She tells me that her solicitor thought she was mad but the buyer was a senior property lawyer who knew what she was doing.
Gassing Station | Homes, Gardens and DIY | Top of Page | What's New | My Stuff