Buying a tenanted property- order for eviction

[Ricco E]

I recently agreed to buy a tenanted property. I've since discovered some facts about the tenants, who have been there since 2010:

1/ 75% of the rent is housing benefit, paid direct to the letting agent, balance payable by the tenant.

2/ There are significant arrears on the rent account caused by housing benefit being witheld for a period due to a change in circumstances. The housing benefit has now been reinstated.

3/ An eviction order has been served on the tenants.

4/ Tenants, keen to stay in the property, agreed to a sizeable repayment schedule with the landlord. This has been adhered to for 2 months. Landlord agreed not to enforce the order providing the repayment schedule was met.

I want to proceed with the purchase whether the order is served or not.

My question though: If contracts are exchanged and the tenants have not been evicted, there will still be arrears on the rent account. Would I be right in thinking that because the previous landlord now has no interest in the property the eviction order would naturally be nullified, and the arrears at exchange would become a matter that the previous landlord would need to persue in the normal way i.e. small claims? And from day one of me being the landlord, arrears are nil?

Thanks for any replies.

[theartfullodger]

When do tenants say they moved in...

[MrJohnnyB]

Depends how the exchange were to take place. I would imagine you may have to pay the current owner the arrears and then you have the right to recover. How it happens on most other investments... Depends what the contract states.

[Ricco E]

Thanks for the replies.

The debt is quite substantial (£2K). If I were to inherit this debt I would not proceed with the purchase.

When you say contract, do you mean the contract of sale? If so, I guess this is negotiable. My required terms would be that the present landlord inherits the debt.

Or do you mean a different contract?

[thesaint]

My required terms would be that the present landlord inherits the debt.

What does this even mean? You would have no debt; There's a credit that you may inherit.

The tenants owe the current landlord the money.
If you were to buy the property, you would serve them the correct papers so you become "The landlord". They would owe you whatever they owe "The landlord".

Whatever both landlords negotiate regarding the sale is up to them.

If you were to issue a new tenancy agreement, they would start with nil arrears(I think).

[45002]

I recently agreed to buy a tenanted property. I've since discovered some facts about the tenants, who have been there since 2010:

Thanks for any replies.

Is this http://www.landlordzone.co.uk/forums...e-any-pitfalls the same Property/Tenants ?

How did you discover the facts on these tenants ?

When do tenants say they moved in...

Thanks for the replies.

The debt is quite substantial (£2K). If I were to inherit this debt I would not proceed with the purchase.

When you say contract, do you mean the contract of sale? If so, I guess this is negotiable. My required terms would be that the present landlord inherits the debt.

Or do you mean a different contract?

So when did these tenants Exactly move in,Have you proof it was 2010 ?

[Ricco E]

What does this even mean? You would have no debt; There's a credit that you may inherit.

The tenants owe the current landlord the money.
If you were to buy the property, you would serve them the correct papers so you become "The landlord". They would owe you whatever they owe "The landlord".

Whatever both landlords negotiate regarding the sale is up to them.

If you were to issue a new tenancy agreement, they would start with nil arrears(I think).

I don't see it that way at all. I've agreed a purchase price. The existing landlord would expect this price and to have the money he is owed paid to him. There's no way he's going to give me what would in effect be the gift of extra money, should I be able to collect it.

My concern would be if the debt was assigned to me in the contract. That would mean I'd have to pay an extra £2K on completion (to leave the existing landlord free of his property and debtor), and leave me with the headache of collection. That's what would make me walk away from the purchase.

Is this http://www.landlordzone.co.uk/forums...e-any-pitfalls the same Property/Tenants ?

How did you discover the facts on these tenants ?






So when did these tenants Exactly move in,Have you proof it was 2010 ?

No, I abandoned the idea of buying the flats. Reasoned that they'd be difficult to sell individually in the future, should I have that need.

I made an appointment to see the estate agent/ letting agent (the vendor is a director) because I wanted more information about the tenancy, before contracts are exchanged.

The lettings manager showed me the tenant's payment record (computerised); which goes back to 2010. I'm interested in why the date is important?

[45002]

Buying any property with Tenants still in place should sets Alarm bells ringing !

The seller may just want a quick sale to off load a problem onto a unsuspecting buyer.

Don't just rely on what a lettings manager tells you the date a tenant moved in or some computer record's....

[Ricco E]

The landlord is selling (this, and 7 other properties) because he was in partnership with someone who is now deceased. The memorandum of sale states the landlord's name together with another, deceased.

I guess those involved in the estate would prefer some cash rather than staying in the property business.

[thesaint]

I don't see it that way at all. I've agreed a purchase price. The existing landlord would expect this price and to have the money he is owed paid to him. There's no way he's going to give me what would in effect be the gift of extra money, should I be able to collect it.

My concern would be if the debt was assigned to me in the contract. That would mean I'd have to pay an extra £2K on completion (to leave the existing landlord free of his property and debtor), and leave me with the headache of collection. That's what would make me walk away from the purchase.

You pay the price for the property. If he wants to forgive or pursue the debt, that is up to him.
If he wants the money to himself, then he can evict them, and then you would have no claim to it.