Buy a property with tenants and agents in place?

Yes Your Move Estate Agents. Used to be Halifax, GA, several others. They now seem to be trying to get loads of rented. And I know some of the gals VERY well, been buying off some of them 15 years & they do tell me, they do have the odd non payer for 6 months, even after all references.

Reply to the comment left by "Mick Roberts" at "15/02/2014 - 09:10":

Mick how do i get in touch with you tried face book ,but no joy regards ts

Reply to the comment left by "tony salmon" at "15/02/2014 - 09:41":

Hi Tony
great to hear you are busy and looking to expand, fancy meeting for a coffee and seeing what we might do to help each other?
check out my profile on here, or take a look at http://www.godirect-franchise.com and give me a call I look forward to meeting you. Regards Don

Reply to the comment left by "tony salmon" at "18/02/2014 - 10:01":

Got your details via Mark, will contact u soon, snided at moment buying quality houses & selling some less quality ones.

Reply to the comment left by "Mick Roberts" at "20/02/2014 - 08:05":

ok mick thanks , ive also sent you a email with mu phone number ,speak when you get a minute regards ts

Reply to the comment left by "Phil Ashford" at "17/02/2014 - 18:07":

Hi Phil. I'm currently considering puchasing an existing student let. This has five existing tenants currently on separate tenancy agreements until 30th June 2014. A single AST has also been signed with new tenants that commences 1st September 2014. The current landlord uses an agent and he has told me I would have to take over the relationship with the agent until the current ASTs have run their course.

I was relieved to see from your response that this is not the case as I want to manage the property myself. How should I go about communicating this to the agent? Do I need to do this or does the outgoing landlord need to end the relationship? Also does the current landlord need to recover any deposits left with the agent and also any rent cheques that may have been paid in advance by the tenants (I think quarterly posted dated cheques have already been taken)?

This is the first time I've been involved in such a purchase but I would expect all deposits and pro-rata rental payments to be handled by my conveyancer as part of the sale completion. I then assume I will have to create new AST agreements and deposit protections with all of the tenants. Is my understanding correct? If so would you recommend moving the five students currently in tenancy onto a single AST agreement as opposed to the five in place at present? The landlord had to let it this way because a prior sale fell through and he could only let it a room at a time as it happened too late in the rental cycle to secure a ready made group. They are all currently coterminous agreements hence my suggestion.

Could the tenants refuse to sign new AST agreements as they have one in place already? I see someone mentioned issuing something called a Section 48 notice. Does this move their obligations under their existing ASTs to the new landlord? If not is there some other way of doing this?

Reply to the comment left by "Steve Gibson" at "24/02/2014 - 17:59":

Hello Steve

An agent has an interest in ensuring they get their appropriate management fee as negotiated with the current landlord.

If the sale didn't happen, the agent would get their usual fee.

The sale, triggers the end of the contractual relationship for that house, since the agency agreement is between landlord and agent. The landlord will be liable for whatever 'exit' fees for the early termination of that contract.

Agents may try to take a 'pragmatic' but dubious approach. Rather than fight with the outgoing landlord to get the exit fees due, just position themselves in a way that any new landlord will become a client. Some will achieve that by truly offering a quality service, some will 'scare' you into it by false claims - like that you as new landlord must form a contractual relationship with them. Remember, you do not, the agent has no power over the property, just a contractual relationship with landlords, of course, you as a landlord get to choose if you enter that relationship.

Equally, outgoing landlords may wish to try and mitigate their 'exit' fees by negotiating with the agent and agreeing to 'convince' a new landlord to go with the agency. Thus, the exiting landlord saves money and the agent keeps the business!! You can see the conflict of interest!

If the agent wants to keep being awkward, I'm quite happy to represent you pro bono. I am a landlord and owner of an agency, I despise this practice in the industry and will quite happily have an Agent to Agent 'chat' about your position.

Now, if you do refuse the agency's work, the outgoing landlord will have a bill to pay. The outgoing landlord may try and seek to recover that in a revised purchase price from you... Since 'you are the one costing them money because you're being awkward with the agent'. You can see that this scenario could get messy....

Witt regard to the ASTs. The change of house ownership does not change the rights of the tenants and their ASTs. You will become the new landlord, issuing them with valid contact details and all terms will become between you and them. I would recommend reviewing all the ASTs in place and checking for conflicts with the group Joint AST in place, and also whether s21s need to be immently issued.

Reply to the comment left by "Phil Ashford" at "25/02/2014 - 00:11":

Thanks for your detailed response Phil. You really know your stuff, or you're psychic because you pretty much described how the negotiation has developed. The agent is asking the current landlord for payment of the full annual fee to break the contract. The basis of this claim is they have put some of their best tenants in the house as they thought is was going to be managed. Had they known, they would not have pushed the letting of this house and would have pointed the contracted tenants towards one of their other managed properties. They do actually let non-managed properties but such properties are clearly not pushed as hard as the managed ones. I wonder if the landlords paying them to advertise non-managed properties realise this!

As a consequence the landlord is trying to re-negotiate the price with me. My response has been I believe I am already offering a very good price based upon the fact it is let. Hence if I now have to pay the costs of letting it it makes the house less valuable to me.

To be fair the landlord is happy to come to a compromise. However what really annoys me is I think the agent is taking advantage of the current landlord. Whilst I can understand they have costs that need to be covered I can't understand how this equates to 100% of their annual fee. Is this normal practice? Would there normally be a clause in the contract covering early termination of such agreements as I can't imagine this is a unique occurrence?

The landlord is a nice old guy and wants an easy life. He's asked me to talk to the agent, which I'm happy to do. However I don't hold the contract with them so I suspect the only conversation they will want to have with me is to persuade me to take their management.

My other concern is that if we settle and pay off the agent, and if new tenancy agreements are required due to the change of landlord, could the agent approach the tenants already lined up and contract them for a different property? Your original response suggested the current ASTs would stand however I received a response from Neil Patterson of Poperty 118 stating new ASTs would be required. This suggests the current ASTs would become null and void and would allow the tenants to break the agreement. Is this the case?

I'm becoming really concerned that I could end up paying over the odds for the property,the secured tenants from September 2014 could walk and I then end up with a void as I will have missed the student intake window.

All further guidance appreciated.

Regards

Steve

Steve,

A Section 48 is notification to the tenant of a new landlord. Without this you cannot legally ask for rent. This needs to be done on the first day you take possession of the property. Serve by first class post with certificate of posting to each tenant,( in addition to personal service)

The issue with new ASTs - I was under the impression that the rights of the old landlord then transfer to the new landlord. But in conversations with the NLA I too was advised to draw up completely new contracts as if in the case of an eviction under Section 21 ( and we all know how difficult County Court Judges can be) then if the landlords details on the Section 21 do not match those on the tenancy agreement then its down the snake to the bottom of the board to start all over again. The problem is - the tenants are not obliged to sign the new agreement so in such cases you have to grin and bear it and hope no S21 procedure is required.

And forgot to add - it is unlikely that the conveyancer will get involved with the deposit side. Moving deposits from one landlord to another is normally at the behest of the "controlling agent" - who is the one holding the money in their deposit protection scheme account - DPS. You will need to ask them to transfer it over. If they do not its a pain to get DPS to do it without their consent.