UK Landlord Forum / Life

I agreed a price to buy this property with a Tenant that has been in situ since 2019 in October this year. Having had the property surveyed it revealed a problem with rising damp. I have negotiated the price and the seller has agreed to reduce the purchase price as long as i can complete by 15th December. I suspect that this is a significant date as the rent is due on the 14th. This is not a problem as all of the searches etc have been done and my conveyancing team seem to think this should be possible. My problem is that the property is sold subject to the Tenant remaining in the property, they are on a rolling month to month contract with a Letting Agent. The current Letting Agency work for the current owners. Do i have to let the rather incompetent LA carry on with the current Tenancy Agreement as it was always my intention to get the Tenant on my own Tenancy Agreement (which they are happy to do as they are not impressed with the Agency either) Problem is that i have very little time to get this sorted now and what is worse is that it has now come to light the Letting Agent made a mistake and did not take a deposit from the Tenant when they moved in, despite it saying clearly on the TA that she paid one and that it is held in a Custodial Deposit Scheme, it seems the current LL didn't know this either and has stated in an email that they would never have agreed to this had they known.  This puts me in an awkward position as the unsuspecting Tenant is blissfully unaware that for me a deposit is a must. I expected that the Letting Agent would just transfer it to me, what a time of the year to have to ask someone for a lump sum too! Not their fault either. I wonder whether this Tenant Agreement would even be legal now or am i going to have to give the LA their 1 month notice as the Tenant would have to or can i just get the Tenant to sign the new Tenancy Agreement and hold back the deposit from their Reservation fee that i owe them upon completion? My Solicitor knew from the get go that the property was to be sold with the Tenant in Situ but now when i put this to them they suddenly are not experts and don't deal with Tenancy agreements! Am hoping this makes sense and someone can help.

When you complete, you become the landlord of the previous tenancy agreement (which you can replace with a new one with the tenant's consent). You don't inherit any relationship with the agent, though. So that arrangement ends automatically.

The vendor needs to transfer the deposit to you on sale. It's their cock up to sort out. But no, you can't just "withhold" something without an agreement.

I have never heard of a conveyancer who can deal properly with purchasing a property with a tenant and is an extremely risky process that I would no longer ever agree to be involved with. The changes in regulation in the last decade mean it is way too complex.


I am slightly concerned that there's some kind of Reservation Fee in this transaction. That doesn't sound at all normal.

Dear God, you are a braver man than I am Gunga Din. Is this your first BTL? I also don't understand what a Reservation Fee refers to?

Thank you very much for the reply, i have copied the text from the advert re the reservation fee, i would appreciate your thoughts on this as i was concerned straight away but the agent (who is also the Letting agent) assured me that this is now quite a normal practice.

"To ensure a fast and secure sale. You will secure the sale with a reservation fee of £1,200 inclusive of vat at offer stage, giving the buyer exclusive rights to purchase within a given timeframe and an additional £1,200 inclusive of vat on completion. Paying the reservation deposit ensures that the seller takes their property off the market as soon as the sale is agreed and reserves it exclusively for you, eliminating gazumping."

There are a number of red flags there, although that's easy for me to say!

First of all, any reputable agent would take the property off the market at sale agreed, as that reserves it for you. Nothing eliminates gazumping and you shouldn't have to have an extra deposit to achieve that. If this is somewhere mad like London, ignore this (and probably everything else).

I don't see why there's a time limit on an agreed amount to compensate for the damp. It's a negotiation tactic to get early completion, which I get, but still.

But as you've paid this reservation fee, it's your money to do what you want with when it comes back. The issue is that the deposit wasn't protected (because it only exists on paper). Which is a headache going forward (along with all the other things that you might have to be able to show were done at the start of the tenancy if you ever want to serve notice on the tenant).

I did write a long reply but it is just easier to tell you to RUN, PULL OUT, CUT YOUR LOSSES!

What you have spent so far is a sunken cost and may dwarf what you will be paying in future.

Quote from: Suzywong on December 07, 2023, 09:27:53 AMThank you very much for the reply, i have copied the text from the advert re the reservation fee, i would appreciate your thoughts on this as i was concerned straight away but the agent (who is also the Letting agent) assured me that this is now quite a normal practice.

"To ensure a fast and secure sale. You will secure the sale with a reservation fee of £1,200 inclusive of vat at offer stage, giving the buyer exclusive rights to purchase within a given timeframe and an additional £1,200 inclusive of vat on completion. Paying the reservation deposit ensures that the seller takes their property off the market as soon as the sale is agreed and reserves it exclusively for you, eliminating gazumping."