Current owner to stay on as Tenant?

[FrozenWaves]

Hey Guys,

Am about to go unconditional on my first property as long as a building inspection doesn't show up anything major.

I have a verbal agreement with the current vendors that they will stay on as my tenants and sign a 12 month fixed term tenancy agreement once i go unconditional.

I am wanting to know if there are any major issues in doing this or is there is anything i should watch out for.

I know i will have to check up on my insurer to see if this is will be an issue. I am pretty sure the current vendors need to sell (as the bank is looming) but am not 100%, hence the reason why they want to stay on and rent from me.

Has anyone else done this sort of thing before?

Any advice will be greatly appreciated!

Cheers

[SuperDad]

The standard issues would apply, I expect.

Most importantly, what is the vendor's/tenant's credit rating like? If the bank is looming, then why?

Paul.

[Son of G]

Take care of the loose ends

It may be too late now but make the contract conditional on the completion of a Tenancy Agreement.

Let them know that they will have to move out if there is no credit check, AP form (I always give the AP form to the bank so I know it is there) and Tenancy Agreement.

Get a signed agreement (could be on the tenancy agreement) that the bond (4 weeks) & first week's rent will be paid out of settlement. That is you pay Settlement Amount less 5 weeks rent. They may not have spare cash now and you are sure of getting the bond.

I did the same thing when I purchased the flat I lived in after I got married. We purchased it about 6 months before the wedding day and the owner was happy to stay till a couple of weeks before the big day. The weekly rent amount was on the S&P contract.

[SuperDad]

Let them know that they will have to move out if there is no credit check, AP form (I always give the AP form to the bank so I know it is there) and Tenancy Agreement.

I didn't think one could legally require rent to be paid by AP?

Paul.

[Son of G]

AP has to signed before Tenancy Agreement. NO AP will mean no tenancy.
That dose not stop someone canceling the AP, but at least I start on the right foot.

[FrozenWaves]

So would it be too late to get them to sign something to say that they will let me take the bond and weeks rent in advance out of the settlement price?
Also, do i need their permission to do a credit check or can i just go ahead and do one?

Thanks again guys

[Son of G]

I do not think it is too late. Any additional caluse can be added to a S&P agreement if both parties are happy. Give your lawyer a call if you are uncertain.
The upside for them is that they do not need to find 5 weeks rent up front.

You most definitely need to have their ink on paper to do a credit check. Also the privacy laws state that you must keep that signed bit of paper for 7 years. For a credit check is usually best to include their drivers licence number (and version) so get them to sign the form when you collect that information.

[Kay]

Handover details

I have recently purchased a property with the same situation as your have.
Everything went sweetly until the final handover, and the tenant didn't
do a proper clean-up. There was food left in the oven, and fleas in the
carpets. Be sure to specify all the required cleaning and outside work
in the rental agreement. We should have mentioned a carpet shampoo.
All the best with your purchase.

[artemis]

Fleas in the carpet can occur in the most immaculate home, especially after the place is empty for a while, eg occupants away on holiday. I think the vibration causes the eggs deep in the carpet to hatch.