Tenants praying for a new landlord to buy their London flat!

Good luck with this Sam and Lizzie. I admire your determination and positive approach to your dilemma and hope that one or more Property118 readers will be interested in doing a mutually beneficial deal with you.

I will send a test enquiry to you in a few minutes time to check the system is working properly 🙂
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There is hopefully a sensible solution to the issue, that allows the tenant and landlord to achieve a mutually beneficial outcome....However, to state that.... "We aren’t DSS, smokers or anything like that..."
Just the issue that there is a very professionally regulated sector that deals exclusively with "DSS" tenants. Some may be unemployed, or smoke cigarettes. Many are perhaps physically disabled, or infirm, elderly, former service personnel, adults with learning difficulties, the terminally ill..
Some properties within the market are privately owned, others are managed by well regulated trusts. Please don`t disparage the less well off, Thank you.

Hi Sam

I see that a couple of our readers have already been in touch.

I'm keeping my fingers crossed for you 🙂

If this works out we may have inadvertently discovered a potential new income stream for Property118 as I'm sure other tenants will find themselves in a similar predicament from time to time.

Please keep us updated on progress.
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One point, just because your landlord sells does not mean you have to leave. Your tenancy continues and would pass to the new owner intact - he would "step into the shoes of" your current guy.

Clearly the current landlord could serve a Section 21 notice on you and then proceed (after 2 months) to gain possession but there is nothing "automatic" that boots you out if he sells. This notice and subsequent possession process takes many months...

There will be a significant difference in the achieved selling price between the place being vacant (higher) and you being there (lower) as the number of potential buyers will be far less with a tenant in place.

As the owner is an investor and clearly intends to continue to be one, you could propose a sort of rent-to-buy direct with him.

Like this:

We are shocked you are selling as we love it here and, as you know, we have been great tenants and have always paid, kept the place clean etc etc.

We would love to buy if from you but my masters course means we can't qualify for a mortgage for x years, even though we can easily afford one.

Can I ask how much you will actually get from the property after selling costs and after redeeming the mortgage? (this is the key point as it might be a LOT or it equally might not be very much at all, depending on how he has managed his lending). (He's told you this is his reason for sale - to use the equity elsewhere)

(assuming the amount of his "net equity" is doable for you) Would you consider us buying the place and exchanging contracts with you and pay out that "net equity" amount as the deposit and then you give us 5 years (or whatever) to complete rather than the usual 28 days? We would take over the monthly mortgage payments in the time between exchange and completion andand carry on with an AST so everything would be above board and would meet your buy-to-let mortgage terms. (he might want something over and above you paying his mortgage every month as his profit for letting you do this)

Solicitors understand this as delayed completion is widespread in the commercial world (and in the transfer of "tired" rented properties). Its a normal conveyance, with a longer completion. You would be granted a 12 month AST with the right to renew for the x years (subject to making the underlying mortgage payments).

You lock in a buy price now. He gets his equity out to buy the other place. He gets an easy sale with no refurb costs and no agent fees.

The risk to you is that you still fail MMR (or whatever follows it) in a few years time....however, the "exchange" can be made assignable so you could sell it on in that case (through an Estate Agent to another buyer) and may even make money if prices rise in the meantime versus the price you agree with the current owner.

If he's an experienced investor, he will (should) be interested. Equally he might "just want it sold" and therefore not.

Yes it's a bit complicated but it depends how much you REALLY want THIS house! After all, moving has lots of complications and costs too. There is a pack of paperwork needed but that's what solicitors are for.

Reply to the comment left by "Bill Khan" at "01/09/2014 - 14:32":

Hi Bill,

Sorry for not replying immediately - You are very right and apologies, I did not want to seem as if I was disparaging DSS renters.

The only reason why I brought it up is because it is usually mentioned in conversations when looking for a new landlord and is often the reason why individuals go looking for new landlords - Goes to show the sorry state of renting for the less well off.

The very best to those in the private sector doing such good work and to yourself, Bill.

Best,

Sam

Reply to the comment left by "Renovate To let" at "02/09/2014 - 17:01":

Hi Renovate To Let,

Thanks for your comment. That's very interesting - I may just propose that to the landlord right now!

I did mention the section 21 to the landlord, but he pointed out that in our contract (which is AST sadly) has a clause which says:

"Notwithstanding the fixed Term as stated in Clause 1 the Parties hereby agree that this Agreement may be terminated by the Landlord or his Agent giving to the Tenant at least two months’ prior notice in writing, such notice not to expire until after six months of the Term have elapsed. For the avoidance of doubt the Tenancy cannot be ended before 05/10/2014... At the end of such notice the Tenancy shall end and all obligations and responsibilities shall cease; subject nevertheless to any claim by either Party against the other in respect of any breach of any of the terms and conditions of the Agreement."

However, it still does not seem kosher to drag this out by ordering him to get a section 21. If we can't stay and are not wanted, then it's inevitable that we move - I'd personally rather leave willingingly than squat on legal technicalities...

I am completely convinced that why he's asking us to leave is due to the selling price of the flat - but as it's his place, it's his call!

Thanks for all your advice though, you've been very helpful.

Best,

Sam