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Thomas
Thomas, Lawyer
Category: UK Property Law
Satisfied Customers: 6290
Experience:  BA (Hons), PgDip, Practising Solicitor
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Hi, I am buying a property but as I still have to sell mine

Resolved Question:

Hi,
I am buying a property but as I still have to sell mine the vendor is willing to rent it to me on a assured short-hold tenancy with the clause that I purchase it when the sale of my property goes through (hopefully within 3 mths anyway) The vendor will put the following clauses into the agreement that it is terminable as soon as my sale completes, on the basis that we take an option to pay a sum of say 5% of the agreed purchase price in the event that we decided against proceeding with the purchase, or once a long-stop date of say 18 months had been reached in the event that your flat is not sold within that period - (This could be extended by agreement, but we wouldn't want it to be an open-ended period for all time).

I am quite happy with this as we want to buy the property and are confident we will sell ours - we would have to rent another property anyway as we rent the property we are selling - so the whole arrangement seems perfect.

Is there anything we should be concerned about with this arrangement?

Many thanks
Paul Hobbs
Submitted: 1 year ago.
Category: UK Property Law
Expert:  Thomas replied 1 year ago.
Hi

Thanks for your patience.


The basic position answer is; no, provided that your solicitor prepares of reviews the tenancy which is to be granted to you.

You will need them to ensure that the clauses relating to your ability and responsibility to purchase upon the sale of your property are properly drafted and fully enforceable. It’s a matter for precise legal drafting and provided this is done then you should be fine.

The one big thing to consider I would say would be if you are planning to purchase the property with mortgage assistance. If you are then you need to ensure that the mortgage does not expire by the time that you are bound to purchase the property once the sale goes through.

If it does expire and you can’t purchase within the stated time in the tenancy agreement then this would put you in breach. IN anticipation of this you should insert a clause which states (say) that if your offer has expired then you will be afforded a period of time within which to secure a mortgage offer and once the offer is issued a further period of time within which to complete the sale.

Needless to say you should get your solicitor to carry out the usual precontract enquiries and searche prior to executing the tenancy because you will be bound to purchase once the sale goes through. If the searches are greater then 6 months old by the time that you come to complete they will have to be carried out again for the benefit of your lender, as this is a requirement in the Council of Mortgage Lenders Handbook.

.Please remember to RATE my answer OK SERVICE, GOOD SERVICE OR EXCELLENT SERVICE or above if you are satisfied that you have received the correct legal advice (even if it is not the answer you wanted to hear), otherwise I do not receive any credit for answering your question.

If you are not willing to rate my answer as OK SERVICE, GOOD SERVICE OR EXCELLENT SERVICE then allow me to assist further by replying asking what clarification you require rather than rating my answer at levels below.

If you wish for me to provide you with further guidance on any question you may have in the future then please submit a further question to the board requesting me either by my profile or by marking your question. “FAO Tom”.

Kind regards,


Tom
Thomas, Lawyer
Category: UK Property Law
Satisfied Customers: 6290
Experience: BA (Hons), PgDip, Practising Solicitor
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