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Selling a house with tenants, but no contracts

Covering Market, Trends, and Practical (but see LEMON-AID for Building & DIY)
Amaryllis
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Re: Selling a house with tenants, but no contracts

#252881

Postby Amaryllis » September 20th, 2019, 12:33 pm

I just wanted to add that, if the tenants have an AST, i.e. Statutory Periodic Tenancy, they may have paid a deposit.

If so, has this been protected according to law, i.e. with the DPS (Deposit Protection Scheme) or some other authorised agency?

It may be worth ringing up these schemes and checking - although I have no idea whether they would divulge this information, given that you are not the official landlord.

If there are ASTs in place, and deposits paid by the tenants have not been protected, the OP will have another problem to sort out.

modellingman
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Re: Selling a house with tenants, but no contracts

#253146

Postby modellingman » September 22nd, 2019, 8:07 pm

Quite a lot of advice so far. Most of it good.

If you are going down the vacant possession route then you give the tenants notice, in line with any terms set out in their ASTs (this could be, though is unlikely to be, more than the statutory minimum of two months).

The difficulty arises if any tenant chooses not to leave by the end of the notice period. Then you will have to apply to the local County Court for an accelerated possession order under Section 21 of the Housing Act. And that's when you will really have to ensure that you have dotted all the i's and crossed all the t's., Because courts have no discretion to refuse a valid application, they are pretty strict in ensuring validity - ie that landlords have successfully cleared all the legal hurdles involved. I've successfully been through the process as a landlord so have some understanding of it.

As well as the hurdles noted by others of Form 6A (correct form of Notice under Section 21), government How to Rent booklet, EPC and Deposit Protection, the property is an HMO and so will also need a valid HMO licence. These are issued by the local authority and last for 5 years. Additionally, you will need to be able to demonstrate to the court that you have both validly served the Section 21 notice on each tenant and that they have received all the necessary documentation. I can't remember whether you also need to submit a copy of the tenancy agreement with your application - but inability to do so could be a problem, particularly if a tenant defends your claim for possession by claiming that a term of the agreement (such as the notice period) has not been complied with. If deposits were taken then you should be able to enquire with the various providers (there are only a handful) as to whether they were protected (as legally required, even with pre-2007 tenancies) and if so whether under a custodial or insurance based scheme. If you do not retain copies of the Prescribed Information (a statutory document that should have been given to tenants informing them amongst other things which scheme has protected their deposit) then you would be well advised to return the deposit to tenants prior to issuing your Section 21 notices (and, create and retain evidence that you have done this). Be aware failure to have protected a deposit in line with statutory requirements means a tenant can take the landlord to court and the court can award the tenant between 1 and 3 times the deposit amount, irrespective of anything else.

Despite its name, the accelerated possession order is not that quick. You may have to wait several weeks before your application gets to be seen by a judge. The tenant is given 14 days to file a defence. Even if there's no defence and you get judgement in your favour the tenant will get at least a further 4 weeks before possession is required to be given up. If the tenant still doesn't go you are then down the route of using court bailiffs to enforce the possession order - with more delay and cost involved. In my case, there was an additional delay of four weeks simply waiting for the court office to type up and issue the judge's order to the tenant involved. Welcome to the world of landlording.

For your position I recommend spending £60 (or whatever the cost is these days) to join the National Landlords Association. They have an excellent online library and telephone helpline available to members and will be a much more focused source of advice than you are likely to find here. No disrespect intended to those who have already contributed but the NLA will provide a single source for making sure all your bases are covered (including dealing with the missing tenancy agreements). They will also be able to put you in touch with  specialist services (such as Landlord Action) who assist landlords with the eviction process and who are likely to be more effective than the average solicitor.

hiriskpaul
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Re: Selling a house with tenants, but no contracts

#253495

Postby hiriskpaul » September 24th, 2019, 9:41 am

Thanks for all the helpful comments. Thankfully, we have found a valid HMO license and EICR certificate. Gas was cut off years ago due to the onerous requirements.

It has occurred to me that giving notice now would mean marketing in December. Also, it may be difficult for the tenants to find alternative accommodation starting in December. Similarly giving notice for the end of December would be insensitive, so we are currently considering giving 4 months notice, expiring at the end of January. How does that sound?

Thanks for the tip on the National Landlords Association. I will look into this.


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