Buying tenanted flat - complete on vacant possession

[Mrhappy]

Hello. A neighbour recently offered to sell me his property. The property has been the cause of problems for years so I was very keen. The offer I made was on the generous side.

He accepted but the property is currently tenanted. He said he would only serve a section 21 notice once we've exchanged. This he said would protect him from the risk of me backing out and him being left with a period when it's empty. He said completion would be on vacant possession.

So he has to give his tenants eight weeks' notice. But I think he may have to take it to court. Which I guess could end up being anything from six months to a year.

Can you build conditions into the contract at specific milestones to protect yourself from the risk it'll go on for a long time? Or to compensate?

Bearing in mind the landlord would also have legal bills to pay if the tenants don't leave at the end of their notice period, it might make more sense for him to pay the deposit for them on a new flat to offer them a simple way out. I don't know if you can do that. Just a thought.

[R0b]

Hello

The general rule is that you can build anything into a contract as long as it is lawful. Contracts are based on common law and the courts are generally reluctant to deviate from what the parties have agreed, however bad a bargain it may be. That's because both parties have the freedom to negotiate and agree whatever terms they like, so long as it is within the law.

I'm not a property expert but given that the sale and purchase of property is a contractual agreement, I see no reason why you can't build into the contract certain provisions to enable you to withdraw from the sale, be compensated or even both, in the event that the tenants do not leave.

How the landlord chooses to deal with the tenants if they don't move on is entirely up to him but having said that, you could suggest or stipulate certain measures in the contract that the landlord should take which could include offering to pay the costs of the tenants' home move.

The key consideration for you is to ensure that the contract makes it clear that any action taken or may be taken against the tenants to remove them from the property will be at his expense, not yours. You will also need to deal with the deposit side of things and how that is returned if you back out of the sale.

There may be other considerations but I'm your conveyancer or solicitor should be able to advise on that.

[des8]

If contracts are exchanged for the sale of a tenanted property when vacant possession is to be given, it is usually agreed completion will take place within a specified period (e.g. seven days) of the buyer being given notice that the tenant has vacated the property. But in this case neither of you can be certain when completion will be. As you say it could end up being anything from six months to a year.

If you agree a fixed completion date before the tenant has actually left it becomes a problem if the tenant is still in occupation on the agreed date. You would be entitled to delay completion and might be able to terminate the contract and sue for damages

[Mrhappy]

Thanks, both. That's very helpful.