Purchasing a property with a tenant but no documentation.
We are currently attempting to purchase a property which has a tenant who's rent is paid by the Council direct to the Letting Agent. We were set to "Complete" on 23 Dec, despite several requests by our solicitor, it was not disclosed to us that a copy of the Tenancy Agreement was not available until the day before planned completion. The current AST was required by our lenders i.a.w. the CML Handbook regulations and so the Completion was delayed. Our understanding is that the lenders would need assurance that they could obtain Vacant Possession should we default on our mortgage.
We have the Vendor's ascertion that the tenant took up residency sometime in year 2000 but no proof; their ascertion is that the Tenancy is a "Periodic Tenancy" and therefore transferrable. There are historic arrears which we understand would be wiped if the Vendors issued a new AST. However, they claim it is within our power to issue a new AST on purchase whereas our advice is that it is the current landlords (Vendors) who should issue a new AST and deal with heir arrears seperately.
1. Is the transfer of a "Periodic Tenancy" with no proof of AST or TA, at the time of purchase, legal or indeed wise for the buyers?
2. Could we issue an AST on the day of completion with a clause protecting us from historic arrears?
3. Would our new AST be able to be enacted upon or would the Tenant have rights as a "Sitting Tenant?"
4. What would be the best way to solve this impass?
Ray & Diane Pearce
Want to read more?
This is a members only forum, if you want to read more you need to login to your membership, if you are not a member, click here to join.