Buying a flat where the deposit has not been protected?

Buying a flat where the deposit has not been protected?

11:21 AM, 24th June 2024, About 6 months ago 5

Text Size

Hi all. I’ve been offered a flat where the tenants have been renting for more than 3 years on a rolling periodic agreement.

However, the existing owner/manager has not protected the deposit. Is this the current landlord’s problem?

Do I set up a new AST agreement with my solicitor or take over the existing agreement and protect the deposit as it should be?

Or do I walk away?

Any advice would be greatly appreciated.

Mike


Share This Article


Comments

Paul Essex

Become a Member

If you login or become a member you can view this members profile, comments, posts and send them messages!

Sign Up

12:51 PM, 24th June 2024, About 6 months ago

It is generally accepted that you cannot undo a previous landlords error.
The current landlord needs to address the issue before you could confidently buy such a property. The tenants are under no obligation to sign a new contract with you.

Julie Ford

Become a Member

If you login or become a member you can view this members profile, comments, posts and send them messages!

Sign Up

13:37 PM, 24th June 2024, About 6 months ago

Hi Mike, under deposit protection regulations, you are only legally responsible for protecting the deposit when you Receive it.
So the non-protection is the current LL/agents problem.
When you purchase the property you inherit the existing AST with all its terms and conditions, there is no legal obligation to issue a new one, nor does the tenant have to sign it.

You or your solicitor do have to issue S3 &s48 notices on your new tenants to show you are the new landlord and that rent is now due to you etc..

Your legal obligation for the deposit starts when it is transferred to you (you receive it) you then have the 30days to protect and issue the tenant with the certificate and prescribed information

Mike Workman

Become a Member

If you login or become a member you can view this members profile, comments, posts and send them messages!

Sign Up

11:12 AM, 25th June 2024, About 6 months ago

Reply to the comment left by Julie Ford at 24/06/2024 - 13:37
Thanks for the very useful information, much appreciated

Dennis Forrest

Become a Member

If you login or become a member you can view this members profile, comments, posts and send them messages!

Sign Up

12:57 PM, 25th June 2024, About 6 months ago

Or you could insist the purchase goes ahead only on the condition that firstly the seller refunds the deposit in full to the tenant. You would then take over the tenancy without any tenant's deposit. If the discount to market price, because you are buying a property with a tenant in situ is substantial then do you really need to keep back 5 weeks rent as a deposit?

DPT

Become a Member

If you login or become a member you can view this members profile, comments, posts and send them messages!

Sign Up

16:16 PM, 26th June 2024, About 6 months ago

You will probably find that this is just one of several potentially costly mistakes the landlord made. NEVER buy a tenanted property without doing full due diligence on both the property and the tenancy. Start with a read of this thread: https://www.propertytribes.com/26-questions-to-ask-when-buying-a-property-with-tenants-in-situ-t-12038.html

Leave Comments

In order to post comments you will need to Sign In or Sign Up for a FREE Membership

or

Don't have an account? Sign Up

Landlord Automated Assistant Read More