Firstly, sorry for not posting earlier - if it had been on the Legal board I'd have seen it and done so, but I hardly ever visit this board. I realise it's probably too late in this situation, but it may be useful to post for anyone else facing a similar problem, and also to correct some misunderstandings.
GoSeigen wrote:If they move in and it is their only home and you as landlord do not live there an assured shorthold tenancy (minimum 6 months fixed term) will be created whether you like it or not. Agreeing a licence will not get around that statutory, de jure situation. You will be liable for all the attendant obligations and they will not be obliged to leave without you obtaining a court order. So it depends how confident you are that they will co-operate and nothing will go wrong.
I'm afraid this is completely wrong. An assured shorthold tenancy would
not be created in that situation, and the correct way of dealing with it
would be to grant a licence to occupy, which gives no security of tenure or any other tenancy rights.
James wrote:How do the likes of AirBnB and holiday lets get around this? Is there not some way DrFfybes could couch this as a 'holiday' let?
The worst thing you can do in letting is to try and pretend it's something it's not. One of the best known cases in property law is Street -v- Mountford, where a rogue landlord granted `licences' to people who were actually tenants, hoping to deprive them of their tenant rights. It went to the House of Lords, and I'm pleased to say the landlord lost. The court said that the licence was a sham, and that they could look behind the paper document to see the real relationship.
So to describe this as a holiday let when it clearly isn't would run the same risk. The court would look at the substance of the agreement rather than the form, and might well decide it was a shorthold tenancy.
I appreciate that the individuals in this case are friends, but (a) circumstances can change and friends can fall out; and (b) it's important for other people to know about this.
DrFfybes wrote:The solicitor said it is doable, but wasn't their field and didn't want to get involved.
This is frankly disgraceful. Any solicitor dealing in conveyancing should have enough knowledge about property law to sort this out. I suspect you may not be dealing with a solicitor, but with a `conveyancing executive' or some such term, meaning someone who has no qualifications at all. If it is a solicitor then they should be ashamed of themselves!
The best solution would be just to exchange contracts and let the buyers move into occupation. The sale contract will incorporate the Standard Conditions of Sale, and condition 5.2 covers this situation. It can be summarised as follows:
If the seller agrees to allow the buyer to occupy the property between exchange and completion then the buyer occupies under licence (no tenancy is created as this might give the buyer additional rights which are not intended) from the seller on the following terms:-
The licence cannot be transferred, that is to say the buyer cannot pass his right to occupy the property to someone else
Members of the buyer's household only may occupy the property with him
The buyer is to pay for or indemnify the seller against all outgoings and other expenses associated with the property
The buyer is to pay a fee to the seller at the same rate as interest would be charged under the contract for late completion. This fee is payable daily for every day of occupation up to completion.
The buyer must not alter the property and must maintain in the same state, except for fair wear and tear, as it was on exchange
The buyer must immediately vacate the property when the licence ends
The fee payable is comparable to rent but isn't rent, so there are no tenancy issues.
The completion date could be fixed for, say, 14 days after the seller / their solicitor receives the grant of probate.
Having said this, the standard advice from a buyer's solicitor would probably be not to exchange until the grant has been issued, as that's the easiest advice to give and they don't need to apply any thought. If so, the buyers might have to push the solicitor into looking into it.
It should be noted that this only works where a grant of probate is involved, as the executors' power is derived from the Will, not the probate. If someone dies intestate the intended administrator would have no power to exchange contracts until letters of administration were granted.