Experienced Landlord help

[worsy]

We are currently selling my Father in Law's bungalow who sadly passed last year. On another thread I asked a question about whether to do it up in anticipation for sale, and we subsequently spent some money on a new kitchen, carpets etc. the place is ready to move into.

House has been on market for 2 weeks and we have a number of viewings. One yesterday is proceedable but his buysers are pressing him to move. Allegedly he has been looking for 7 months. He has asked via the EA whether he could rent the bungalow whilst the sale went through.

From arisk perspective it is a complete no no from us. The risk being he could decide not to proceed with the purchase and we would become accidental landlords.

Can anyone give me some solid legal reasons why that is a bad idea alos so i can be armed if the EA tries to pursuade us ?

[randlemarcus]

How long are you looking at? If its a short term thing, consider doing it on an airbnb style let, rather than getting near an assured shorthold tenancy. Far fewer rights etc.

[nickd01]

I don't think his mortgage company would like it either; I think there's clauses that stipulate 'vacant possession'
I was asked buy my buyer to do this, and my solicitor (And the EA to be fair) said not to.
Why don't you exchange and then he goes into an AirBnB for a while?

[worsy]

randlemarcus said:

How long are you looking at? If its a short term thing, consider doing it on an airbnb style let, rather than getting near an assured shorthold tenancy. Far fewer rights etc.

Thanks, still not keen to be fair. Gives someone the opportunity to find things wrong and chip the price.

nickd01 said:

I don't think his mortgage company would like it either; I think there's clauses that stipulate 'vacant possession'
I was asked buy my buyer to do this, and my solicitor (And the EA to be fair) said not to.
Why don't you exchange and then he goes into an AirBnB for a while?

Good idea. Just checked a reasonable place can be had for 1500 a month locally. He'd probably only need it for 6-8 weeks.

[dan98]

I don't really get the premise of this tbh.

If the EA tries to persuade you, there's absolutely no need for any legal reasoning.

You simply say 'Thanks but no thanks' to this unorthodox offer from the buyer and the buyer will go and find another option for temporary accommodation - simple.


FWIW I wouldn't even entertain the idea - legals or not, it could get *horribly* messy if the sale doesn't work out as planned.

[worsy]

dan98 said:

I don't really get the premise of this tbh.

If the EA tries to persuade you, there's absolutely no need for any legal reasoning.

You simply say 'Thanks but no thanks' to this unorthodox offer from the buyer and the buyer will go and find another option for temporary accommodation - simple.


FWIW I wouldn't even entertain the idea - legals or not, it could get *horribly* messy if the sale doesn't work out as planned.

Yup agreed and my position. However, much easier to shut down the discussion immediately if I could say we would need landlord's insurance for example.

[dan98]

worsy said:

Yup agreed and my position. However, much easier to shut down the discussion immediately if I could say we would need landlord's insurance for example.

The buildings insurance being invalid is one thing for sure.
But also there could be Capital Gains tax on the sale if it's being used as a rental.
As others have mentioned, mortgage issues too.

But the biggie IMO would be any kind of rental contract could be deemed an AST - in other words you'll lose the right to eject them without going through the courts (and that could take up to a year).

The alternative as mentioned could be a 'Holiday Let' arrangement but this has a bunch of other considerations (eg. max. 31 days, business rates etc.etc.).

[worsy]

dan98 said:

worsy said:

Yup agreed and my position. However, much easier to shut down the discussion immediately if I could say we would need landlord's insurance for example.

The buildings insurance being invalid is one thing for sure.
But also there could be Capital Gains tax on the sale if it's being used as a rental.
As others have mentioned, mortgage issues too.

But the biggie IMO would be any kind of rental contract could be deemed an AST - in other words you'll lose the right to eject them without going through the courts (and that could take up to a year).

The alternative as mentioned could be a 'Holiday Let' arrangement but this has a bunch of other considerations (eg. max. 31 days, business rates etc.etc.).

Thanks. Interestingly it seems I can book an AirBNB for two months though? How does that get around any day limitations?

[LooneyTunes]

Don’t let them do it at all: their way of getting in quickly is to exchange and complete quickly. They will be more motivated to do so if they are living in temporary accommodation that they have sourced and has less flexibility.

Irrespective of whether you can find a way to dress it up as a furnished holiday let, you’ve already highlighted the issue of them finding things they don’t like. There is also the risk that:
1) they break something/something breaks;
2) they make a mess of the place and walk away;
3) they somehow manage to fall out with neighbours and walk away.

You also have issues around needing gas safety cert, EICR etc if letting.

worsy said:

One yesterday is proceedable but his buysers are pressing him to move. Allegedly he has been looking for 7 months.

Looking for 7 months for somewhere to buy or to rent? Ultimately neither is really your problem. If he can’t sort temp accommodation then, he’s not actually proceedable.

[dan98]

worsy said:

Thanks. Interestingly it seems I can book an AirBNB for two months though? How does that get around any day limitations?

* corrected - in the UK it seems to be 90 days. But there's a ton of regulation with these - have a look here for example

https://www.pikl.com/airbnb-insurance/airbnb-host-...

[BoRED S2upid]

nickd01 said:

I don't think his mortgage company would like it either; I think there's clauses that stipulate 'vacant possession'
I was asked buy my buyer to do this, and my solicitor (And the EA to be fair) said not to.
Why don't you exchange and then he goes into an AirBnB for a while?

There is but in reality they have to move out for a weekend. I bought a house with a lodger once.

[BoRED S2upid]

dan98 said:

The buildings insurance being invalid is one thing for sure.
But also there could be Capital Gains tax on the sale if it's being used as a rental.
As others have mentioned, mortgage issues too.

But the biggie IMO would be any kind of rental contract could be deemed an AST - in other words you'll lose the right to eject them without going through the courts (and that could take up to a year).

The alternative as mentioned could be a 'Holiday Let' arrangement but this has a bunch of other considerations (eg. max. 31 days, business rates etc.etc.).

There wouldn’t be CGT as it would be from the date of probate to the date of sale how much of an increase would there be in such a short time? Probably not much if anything over the allowance.

[FlyVintage]

worsy said:

Allegedly he has been looking for 7 months

Which already tells you he’ll dither for as long as he can get away with it.

Regardless, your solicitor will strongly advise you against this path but you already know that. A homeless buyer is a motivated one

[silentbrown]

worsy said:

...He has asked via the EA whether he could rent the bungalow whilst the sale went through.

As a counterpoint, we completed a sale very recently with exactly this scenario, and it was no hassle. Buyer avoided having to rent/airbnb elsewhere, and paying two lots of moving costs. We avoided paying council tax for the period he was renting. No problem with mortgage co at all.

We set up a 3-month AST with an agreement that some rent would be returned if completion within a specific timescale. It helped that we'd been letting the house before, so EICR etc were all in place anyway.

[dan98]

silentbrown said:

As a counterpoint, we completed a sale very recently with exactly this scenario, and it was no hassle. Buyer avoided having to rent/airbnb elsewhere, and paying two lots of moving costs. We avoided paying council tax for the period he was renting. No problem with mortgage co at all.

We set up a 3-month AST with an agreement that some rent would be returned if completion within a specific timescale. It helped that we'd been letting the house before, so EICR etc were all in place anyway.

It's good that it worked out, but it's worth mentioning (for the sake of the OP) he was under no legal obligation to leave after 3 months, despite your contract.

If he decided he couldn't leave for some reason, you would've been forced to wait for another 3 months and then issue a section 21 notice...which can take up to a year to sort out.

That might be OK for a regular landlord but in the OP's case, I imagine something of a nightmare scenario.
Especially as they could refuse any viewings of the property for other prospective buyers.

[BoRED S2upid]

dan98 said:

It's good that it worked out, but it's worth mentioning (for the sake of the OP) he was under no legal obligation to leave after 3 months, despite your contract.

If he decided he couldn't leave for some reason, you would've been forced to wait for another 3 months and then issue a section 21 notice...which can take up to a year to sort out.

That might be OK for a regular landlord but in the OP's case, I imagine something of a nightmare scenario.
Especially as they could refuse any viewings of the property for other prospective buyers.

Just let it through Airbnb as a holiday let no need for any tenancy agreement they need it for weeks not months.

[silentbrown]

dan98 said:

It's good that it worked out, but it's worth mentioning (for the sake of the OP) he was under no legal obligation to leave after 3 months, despite your contract.

You're correct - and we were aware of that.

We were lucky enough to have an extremely good and proactive EA, who read the buyers situation very well and was as keen as us to get the sale through.
The prospect of having to pay rent - and a higher stamp duty fee if they missed the March deadline - helped focus the buyer on getting the sale completed, which helped.

[worsy]

LooneyTunes said:

Don’t let them do it at all: their way of getting in quickly is to exchange and complete quickly. They will be more motivated to do so if they are living in temporary accommodation that they have sourced and has less flexibility.

Irrespective of whether you can find a way to dress it up as a furnished holiday let, you’ve already highlighted the issue of them finding things they don’t like. There is also the risk that:
1) they break something/something breaks;
2) they make a mess of the place and walk away;
3) they somehow manage to fall out with neighbours and walk away.

You also have issues around needing gas safety cert, EICR etc if letting.

worsy said:

One yesterday is proceedable but his buysers are pressing him to move. Allegedly he has been looking for 7 months.

Looking for 7 months for somewhere to buy or to rent? Ultimately neither is really your problem. If he can’t sort temp accommodation then, he’s not actually proceedable.

I think this post sums it up for me. Thanks.

Also thanks to those who pointed out the airbnb obligations. That's a definite no no from me.

Now to wait on the buyer as to whether he wants to offer. Every day is a homeless day or risk of losing his buyer though.

[NDA]

worsy said:

Now to wait on the buyer as to whether he wants to offer. Every day is a homeless day or risk of losing his buyer though.

To be honest, that's not really your problem.

Good advice on here about definitely not letting him rent while he waits - he can find a rental (which is what I did when I was buying a few years ago) or AirB&B.

Keep it simple.


ETA I've been helping out a friend with a rental where he's owed £15k in arrears and they've trashed the place. The whole thing has been an utter nightmare.... the law is on the side of the tenant.

[silentbrown]

worsy said:

Now to wait on the buyer as to whether he wants to offer.

FFS! I hadn't realised they hadn't even made an offer.

That's absolutely a flat no. With the buyer above we'd already accepted an offer, he had survey completed, etc.