Logo
Results 1 to 5 of 5
  1. #1

    BTL Investment With Tenant In Situ

    Hi Guys & Girls,

    Looking for some tips.

    I'm currently weighing up a BTL investment with a tenant already in situ on a rolling contract. The tenant has been there since 2013 and is happy to stay if the new owner is willing.

    I've requested the referencing done when the tenancy was agreed but can not get this due to data protection.......understandable I guess.

    Apart from the usual checks when buying a BTL, is there any additional checks you would do to ensure a smooth transaction and no hidden surprises from the tenant?

    I know there could be a million reasons for the current owner wanting to sell but i've always found it suspicious if it seems like a good buy.

    Any advise would be appreciated

    Rob

  2. #2
    Hi Rob,

    I am in the same boat!
    I am currently buying a flat with a tenant in situ and I was told that they have been paying the rent etc.
    I would check if they are working, I just asked the tenant when I went for the second viewing. I also asked if they have any problems with the flat or the neighbours, just to try to judge character. I was Very friendly and casual and she told me quite a few things!
    You can ask your solicitors to check everything when your offer has been accepted and if you are not happy with anything, you can do something about it. I know you would have paid valuation fee and solicitors deposit but I think buying with a tenant in situ could be a great thing.
    These are the questions I sent to my solicitors to check:

  3. #3
    1 How long have the tenants been at the property?
    2. Have the tenants ever been, or are they currently, in rent arrears?
    3. What references and checks were taken for the tenants? Can I see them?
    4. Do the tenants have rent guarantors? If so, what references and checks were taken for them?
    5. Are there any ongoing disputes with neighbours regarding antisocial behaviour?
    6. Does the current landlord expect to deduct costs from the tenants for damages to the property or its contents?
    7. When was the boiler last serviced, and how old is it?
    8. Has the owner ever made any insurance claims against the property?
    9. Are there any outstanding repairs or tenant requests that require attention?
    10. Has the property ever been treated for damp?
    11. Is there a history of pest infestation at the property?
    12. What type of tenancy agreement is in place?
    13. How long is left on the current tenancy agreement?
    14. Was the tenancy agreement drafted by a reputable law firm (and are there any associated copyright issues?)

    I hope this helps!

    keep us posted!

    Kind Regards
    petya

  4. #4
    Rob hi

    I bought a property with a tenant i situ last year and its great - you get rent from day 1, there are no search fees to pay, no void council tax to pay and you have a tenant with a track record and happy to pay rent for the foreseeable future. When buying property like this you also have to remember that there is another individual who is intimately involved and has limited control of what is going on with their home - hopefully they will be keen to impress and work with the new landlord as they will not want the stress and upheaval of looking for a new property and then moving.
    I think that some people can read too much into the sale with tenant in. We regularly sell properties (at work) with tenants in place and are happy to assist the process as we work hard to keep the new landlord on board and will provide the necessary paperwork for the new landlord to scrutinise.

    You should be asking copies of the following:

  5. #5
    • The contract they signed - as it is an AST on periodic you can take them on the existing contract and only the landlord's details change. If the tenancy has been running for 4 years it is unlikely that there have been any significant problems but it might be prudent to ask for proof of last 6 months rent payment. It is worth asking if there have been rent arrears but with a tenancy lasting 4 years it is unlikely as the landlord would have ditched them - asking about references is largely immaterial as life has moved on too far for them to be of use. If there was a guarantor you will need to have copies of the contract they signed and their full contact details as you will need to inform them that you now are the legal landlord.
    • As Petya indicated above it is worth scrutinising the quality of the contract as some are not well written and these can be from self managing landlords, lower quality agents and solicitors who are not fully familiar with the requirements of current letting law. Bear in mind that the contract, from what you say, is 4 years old and there have been several legal changes since then but the contract can still be more than adequate and cover all the major issues. If you are not familiar with looking at ASTs then it is worth getting someone who is to have a look at it. If you are not happy with the contract you can try and negotiate the tenant signing a new, up-to-date AST but don't lose a good tenant for it unless you feel you are significantly at risk - sell it to the tenant as making them safer and also it would add to their certainty as their tenure would be protected for another fixed term.
    • The inventory signed at the start of the tenancy together with photos
    • A copy of the deposit certificate - so that you can make arrangements for the transfer either to your deposit company or your agents if you are not managing it. Remember the deposit is not your money and so you should not physically see it - if you are using the DPS custodial service you should make sure that the vendor has your registration number and arranges for the transfer into your account. Once the deposit has been transferred you need to ensure that the tenant receives new copies of appropriate Prescribed Information and the terms & conditions of the scheme in use. You must do this within 30 days or you will not be able to issue a section 21 notice.
    • Details of any rent rises as you will not be able to put in for a rent increase for 12 months from the previous rise - it is also worth remembering that you appear to have a long term tenant in place who are worth keeping so try not to scare them off - on month's void finding a new tenant can be more costly than 18 months 20 - 30 rent hike
    • Copy of the EPC and proof that it was also given to the tenant - if not give a copy to the tenant once you are the owner and get them to sign as having received a copy on a tick sheet.
    • Give your new tenant a copy of the Government's How To Rent leaflet - not technically required as tenancy precedes it but it is covering you in any future event.
    • Copy of the last 2 Gas Certs as tenants will have needed to have been given copies - copy these and give them to tenant &get them to sign for it. If there are gas certs the boiler will have most likely been serviced at the same time. If there is an oil-fired boiler there is no legal requirement for a safety certificate but it is worth asking for one to be carried out. If there are solid fuel installations it is also worth asking for proof that the chimneys/flues have been swept by a qualified sweep - they issue safety certs too
    • Proof of smoke alarms & preferably age as smoke alarm sensors are only good for 10 years - battery or mains supplied
    • Proof of CO alarm - if required by law.
    • Your solicitors standard purchase process will include questions on boundary/ neighbour disputes, maintenance issues and requests for any guarantees/ warranties etc

 

 

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •