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'Breaking' continuous occupation
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26-09-2012 9:45pm#1Quick question:
We have a property which we've just agreed the sale of. The purchasers are the neighbours of that property. We've had the same tenants for the last 19 years. The new owners are their friends and are open to letting the tenants stay but want to create a new lease rather than allow them to carry on the rights etc. from the old one ie. they want them to have the rights of new tenants.
Do you know if there is some mechanism whereby the tenants move out of the house for a nominal period (say, a day) which breaks continuous occupation and then allows a new lease to be entered into which is unrelated to or unencumbered by their rights under the old lease? The plan would be that if, as in the example, the period I mentioned (a day) applied then the tenants would leave the property one day before closing and would re-enter under the new lease on the date of closing.
The sale is subject to vacant possession so unless we can figure that out we must simply ask them to leave prior to closing and then let purchaser and tenant figure it out between themselves
Cheers0
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Quick question:
We have a property which we've just agreed the sale of. The purchasers are the neighbours of that property. We've had the same tenants for the last 19 years. The new owners are their friends and are open to letting the tenants stay but want to create a new lease rather than allow them to carry on the rights etc. from the old one ie. they want them to have the rights of new tenants.
Do you know if there is some mechanism whereby the tenants move out of the house for a nominal period (say, a day) which breaks continuous occupation and then allows a new lease to be entered into which is unrelated to or unencumbered by their rights under the old lease? The plan would be that if, as in the example, the period I mentioned (a day) applied then the tenants would leave the property one day before closing and would re-enter under the new lease on the date of closing.
The sale is subject to vacant possession so unless we can figure that out we must simply ask them to leave prior to closing and then let purchaser and tenant figure it out between themselves
Cheers
If the purchasers are using a mortgage to buy the property they will have to have 'vacant possession' as no bank will lend with tenants in situ if they are purchasing the property as a homeloan. I think you'll need to explain the situation to the tenants and if they agree to sign a new lease and by bound by the rights of a new tenant then so be it and any problem further down the road would be between the new owners, their lender and the tenants. You should check with your solicitor in relation to the tenants rights and whether entering into a new lease as first time renters negates the previous time they spent in the property and rights they would have acquired as a result of that.0 -
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If the purchasers are using a mortgage to buy the property they will have to have 'vacant possession' as no bank will lend with tenants in situ if they are purchasing the property as a homeloan. I think you'll need to explain the situation to the tenants and if they agree to sign a new lease and by bound by the rights of a new tenant then so be it and any problem further down the road would be between the new owners, their lender and the tenants. You should check with your solicitor in relation to the tenants rights and whether entering into a new lease as first time renters negates the previous time they spent in the property and rights they would have acquired as a result of that.
Yeah, obviously we won't be agreeing a new lease with them, we're just trying to facilitate them avoiding inconvenience as far as they can. I have a feeling that even if they agreed the new lease with the tenants that legally the tenants may still be entitled to various rights even if they sign a lease contrary to those rights. I'll get it checked in the morning.
Cheers for the reply.0 -
I genuinely wonder how this will turn out. Do let us know please if they agree or decide to stop being nice over this. Was the lease renewed each year or so. As in was it a fixed contract that was renewed or did they obtain a Part 4 Tenancy.
Well there was an original one year lease which has never been replaced/renewed etc. so yeah, there would be an entitlement to a Part 4, though they never acted upon it.
But as it's a very friendly relationship and their rent in that time was little more than a nominal, caretaker's rent, it's unlikely to be a problem (famous last words:)). But notice has been served, an exit date has been agreed and we're just looking to avoid having them pack their stuff and leave if at all possible.0 -
I see. It may all go well. If they agree to exit and vacate for however long is necessary then it should be ok. I assume the new lease will still have same rates etc so they are happy enough to oblige. I really don't know the answer to your original question I am afraid but I am interested in that answer myself. Hopefully someone here has it.0
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For me the best solution is to sit down with the tenants and the new owners and discuss it fully. Get the new owners to draft out the lease that they want the tenants to sign, and let thet the tenants make up their own mind. The tenants can sign the new lease at any time with the new owners; they dont need to move out first in order to do it.
If they dont agree to the terms of the new lease then you can issue the tenants with the 112 days notice that is required, stating that you want to sell. This notice must be given before the new owners buy; the part 4 tenancy states that the landlord can only ask the tenant to leave if they need the house for themselves, a family member, if they wish to sell or if the tenancy is no longer suitable for the tenants.
The only reason they would move out for a nominal period would be if the owners wanted them to start on a new tenancy cycle (no fixed term/part 4 for 6 months then aquire a part 4 after 6 months), but honestly I have no idea why the tenants would agree to that, as they could be asked to leave for any reason in those first 6 months.0 -
In other words, you want to invalidate the terms and conditions of the Residential Tenancies Act 2004 by some means. Any claim brought by the tenants for so doing would result in a costly damages against you.Quick question:
We have a property which we've just agreed the sale of. The purchasers are the neighbours of that property. We've had the same tenants for the last 19 years. The new owners are their friends and are open to letting the tenants stay but want to create a new lease rather than allow them to carry on the rights etc. from the old one ie. they want them to have the rights of new tenants.
Do you know if there is some mechanism whereby the tenants move out of the house for a nominal period (say, a day) which breaks continuous occupation and then allows a new lease to be entered into which is unrelated to or unencumbered by their rights under the old lease? The plan would be that if, as in the example, the period I mentioned (a day) applied then the tenants would leave the property one day before closing and would re-enter under the new lease on the date of closing.
The sale is subject to vacant possession so unless we can figure that out we must simply ask them to leave prior to closing and then let purchaser and tenant figure it out between themselves
Cheers
If the tenants have a Part 4 tenancy (i.e. any fixed term has expired and not been renewed or there was never a fixed term agreement), then the tenants may be issued with a Notice of Termination under the grounds provided in the RTA 2004 and must give 112 days notice.
However, as djimi says, why rock the boat for no reason real (apparent) reason. Have a get together and discuss the matter.
The new owner/landlord may want to include special clauses such as no smoking or no pets, which he is entitled to do. However, no valid clause may be included which breaches the RTA 2004 rights of the tenant. Likewise, the tenants are a liberty to accept or reject the terms of any new lease. The tenant may also decide if they want a fixed term lease or a Part 4 lease.0 -
For me the best solution is to sit down with the tenants and the new owners and discuss it fully. Get the new owners to draft out the lease that they want the tenants to sign, and let thet the tenants make up their own mind. The tenants can sign the new lease at any time with the new owners; they dont need to move out first in order to do it.
If they dont agree to the terms of the new lease then you can issue the tenants with the 112 days notice that is required, stating that you want to sell. This notice must be given before the new owners buy; the part 4 tenancy states that the landlord can only ask the tenant to leave if they need the house for themselves, a family member, if they wish to sell or if the tenancy is no longer suitable for the tenants.
The only reason they would move out for a nominal period would be if the owners wanted them to start on a new tenancy cycle (no fixed term/part 4 for 6 months then aquire a part 4 after 6 months), but honestly I have no idea why the tenants would agree to that, as they could be asked to leave for any reason in those first 6 months.
Cheers. Yeah, we've given valid notice on the basis of wanting to sell and are discussing it with them. We're really just trying to facilitate a way in which they don't have to move all of their stuff out to effect vacant possession only to move back in days later. We're not going to be a party to the new lease, just trying to know where we stand in advance of discussing it more seriously.In other words, you want to invalidate the terms and conditions of the Residential Tenancies Act 2004 by some means. Any claim brought by the tenants for so doing would result in a costly damages against you.
If the tenants have a Part 4 tenancy (i.e. any fixed term has expired and not been renewed or there was never a fixed term agreement), then the tenants may be issued with a Notice of Termination under the grounds provided in the RTA 2004 and must give 112 days notice.
However, as djimi says, why rock the boat for no reason real (apparent) reason. Have a get together and discuss the matter.
The new owner/landlord may want to include special clauses such as no smoking or no pets, which he is entitled to do. However, no valid clause may be included which breaches the RTA 2004 rights of the tenant. Likewise, the tenants are a liberty to accept or reject the terms of any new lease. The tenant may also decide if they want a fixed term lease or a Part 4 lease.
No, as I've said a couple of times, the new lease would be with the new owner and the current tenants. We've complied with out legal obligations and will do until they leave the property (or, if the new owners are agreeable, they complete the sale without the need for vacant possesion). We're not invalidating anything. So any claim for damages would be unstateable (as against us).
The new owners are simply trying to see if they can allow them to stay without the rights which accrued under the old lease. If that's not possible, so be it. I always sort of assumed they couldn't contract out of their legal rights. It doesn't affect us either way. As I mentioned above, we're only looking to make things as easy as possible for everyone.0 -
The only way would be for them to move out completely before the closing. Photograph the empty house with the old owner showing everything gone. After the new owner takes over they photograph the empty house and would have to agree a new lease. All accounts should be changed over to the name of the new owner at the closing as well. There should be absolutely no continuity of any description.0
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The new owners are simply trying to see if they can allow them to stay without the rights which accrued under the old lease. If that's not possible, so be it. I always sort of assumed they couldn't contract out of their legal rights. It doesn't affect us either way. As I mentioned above, we're only looking to make things as easy as possible for everyone.
The old lease is gone; the tenants are currently there under a part 4 tenancy, and the options the new owners have are to allow them to remain on a part 4 (essentially continue on as is) or to get them to sign a new fixed term lease. Neither of these options would require them to leave, unless the new owners want them to start again as new tenants which quite frankly makes no sense an the tenants would be well within their rights to get annoyed about.
I would suggest that if the tenants have been there for 19 years then they are probably not going to be going anywhere, and the new owners may be as well to let things continue on with the tenants remaining on a part 4 tenancy, for the time being at least. It probably suits both parties to have a bit of time to size each other up before committing to a fixed term lease!
The only reason I can see to try and get them to sign a fixed term lease is if they want to get them to agree in writing to some specific criteria (no smoking or no pets or something like that), but again after 19 years chances are its too late to start putting these changing these kind of these kind of criteria!0 -
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Milk & Honey wrote: »The only way would be for them to move out completely before the closing. Photograph the empty house with the old owner showing everything gone. After the new owner takes over they photograph the empty house and would have to agree a new lease. All accounts should be changed over to the name of the new owner at the closing as well. There should be absolutely no continuity of any description.
Why would you need to go through all of this if the tenants intend on staying ing the property? The new owners are buying the place with sitting tenants; I dont see why any of this is necessary if the new owners are happy for the tenants to stay on.
Unless its to do with the mortgage terms or something, which quite frankly is a different matter entirely.0 -
I'm in absolute agreement with djimi, here.The old lease is gone; the tenants are currently there under a part 4 tenancy, and the options the new owners have are to allow them to remain on a part 4 (essentially continue on as is) or to get them to sign a new fixed term lease. Neither of these options would require them to leave, unless the new owners want them to start again as new tenants which quite frankly makes no sense an the tenants would be well within their rights to get annoyed about.
I would suggest that if the tenants have been there for 19 years then they are probably not going to be going anywhere, and the new owners may be as well to let things continue on with the tenants remaining on a part 4 tenancy, for the time being at least. It probably suits both parties to have a bit of time to size each other up before committing to a fixed term lease!
The only reason I can see to try and get them to sign a fixed term lease is if they want to get them to agree in writing to some specific criteria (no smoking or no pets or something like that), but again after 19 years chances are its too late to start putting these changing these kind of these kind of criteria!
Any move to try and deprive the tenants' rights which they have, by having them vacate, take photos of an empty dwelling and start anew with a new lease wityh the new landlords would contravene everything set out in the RTA as regards the tenants' rights to security of tenure.
Whether the tenants move out for a few days or even a month would be seen as trying to take from the tenants' rights under the RTA. Furthermore, the PRTB would see from any new registration of the tenancy that it is the same tenants and the same property - thus conclude that something underhand is being attempted. Should a claim be brought against the new landlord using this as evidence, I can see the PRTB awarding the tenants damages.
It seems to be a lot of work for very little, if any, advantage to the new landlord. Do the new landlords know and understand the RTA 2004?0 -
Why would you need to go through all of this if the tenants intend on staying ing the property? The new owners are buying the place with sitting tenants; I dont see why any of this is necessary if the new owners are happy for the tenants to stay on.
Unless its to do with the mortgage terms or something, which quite frankly is a different matter entirely.
The o/p has made it clear that it is not an assignment of the existing lease. He states that the sale is subject to vacant possession. That is required by the contract. the o/p has to deliver a vacant house to the purchaser. The tenants have been given notice of termination as is allowed by law and are required to vacate.
the new owners may be willing to lease to the current tenants but only if there are no accrued rights. It must be capable of being demonstrated that it is indeed a new lease and not an assignment of an existing lease with the tenants remaining in situ. The new owner must ensure that the tenants do not go to the PRTB claiming any rights deriving from their previous occupation.0 -
Milk & Honey wrote: »The o/p has made it clear that it is not an assignment of the existing lease. He states that the sale is subject to vacant possession. That is required by the contract. the o/p has to deliver a vacant house to the purchaser. The tenants have been given notice of termination as is allowed by law and are required to vacate.
the new owners may be willing to lease to the current tenants but only if there are no accrued rights. It must be capable of being demonstrated that it is indeed a new lease and not an assignment of an existing lease with the tenants remaining in situ. The new owner must ensure that the tenants do not go to the PRTB claiming any rights deriving from their previous occupation.
This is the crux of it. If the answer is that, regardless of their tenancy being formally terminated by us, they are still entitled to the same rights under the new lease as they were by virtue of the old lease then of course it doesn't make sense for them to sign a new lease. It wouldn't serve any useful purpose.
This isn't an area of the law I'm particularly knowledgeable about, much less interested in, so I'm just trying to tease out how they might go about it at the least inconvenience to everyone. Depending on their own plans for the place, if they feel they're taking on too much hassle with the current tenants I could see the new owners just renting the place to someone else/not bothering to rent at all.0 -
This is the crux of it. If the answer is that, regardless of their tenancy being formally terminated by us, they are still entitled to the same rights under the new lease as they were by virtue of the old lease then of course it doesn't make sense for them to sign a new lease. It wouldn't serve any useful purpose.
This isn't an area of the law I'm particularly knowledgeable about, much less interested in, so I'm just trying to tease out how they might go about it at the least inconvenience to everyone. Depending on their own plans for the place, if they feel they're taking on too much hassle with the current tenants I could see the new owners just renting the place to someone else/not bothering to rent at all.
I think that you and the new owners need to sit down and work out exactly where they want to go with this, and do so with the interest of the tenants in mind. If the new owners want the place empty when they get the keys then you need to inform the current tenants of that now so that they can make arrangements to move. The new owners cannot say that they may or may not sign them onto a new lease; that is taking the piss out of the current tenants quite frankly. Either they buy the house with the intention of allowing the tenants to remain, or if that is not an option then they do the decent thing and tell them now so that they can make other arrangements and be gone when the new owners get the keys.
The new owners need to be made aware that they current tenants are going nowhere for the next 4 months (or 4 months from the time you gave them notice to vacate). If they require the property to be vacant when they get the keys then they need to find a way to work around that...0 -
I think that you and the new owners need to sit down and work out exactly where they want to go with this, and do so with the interest of the tenants in mind. If the new owners want the place empty when they get the keys then you need to inform the current tenants of that now so that they can make arrangements to move. The new owners cannot say that they may or may not sign them onto a new lease; that is taking the piss out of the current tenants quite frankly. Either they buy the house with the intention of allowing the tenants to remain, or if that is not an option then they do the decent thing and tell them now so that they can make other arrangements and be gone when the new owners get the keys.
The new owners need to be made aware that they current tenants are going nowhere for the next 4 months (or 4 months from the time you gave them notice to vacate). If they require the property to be vacant when they get the keys then they need to find a way to work around that...
No one's having the piss taken out of them. The sale was agreed days ago by means of an auction. The purchasers couldn't have known for sure they'd get the property. Everyone is scrambling to sort it out as quickly as possible. The sale was always subject to vacant possession. It was only in the days following that it became apparent that might be a bit more fluid than was thought.
The tenants right now are in the same position they have been for the last couple of months: they have had their tenancy terminated and will be expected to leave the property by the specified date. They haven't been labouring under any other impression. If they get to stay then it's an added bonus. All I'm doing, subject to a bit of discussion between solicitors, is trying to find a way which suits everyone.0 -
Have they served their termination notice (was it issued more than 112 days ago)? If so then why are they even still there?
If their notice period is not yet up then you and the new owners have a problem, because legally they will not be getting a vacant property until those 112 days have elapsed.
If the sale is subject to a vacant possession then the property must be vacant; ask them to leave (if the notice period is up). There really isnt any way other around it. If the new owners want to take in tenants then great, but they cannot expect these people to move all of their stuff out temporarily and the wait to see if they can move back in again; thats just nonsense.
Of course, if the tenants agree to allow themselves to be messed about then more power to them, but realistically not many people would put up with that.0 -
Have they served their termination notice (was it issued more than 112 days ago)? If so then why are they even still there?
If their notice period is not yet up then you and the new owners have a problem, because legally they will not be getting a vacant property until those 112 days have elapsed.
If the sale is subject to a vacant possession then the property must be vacant; ask them to leave (if the notice period is up). There really isnt any way other around it. If the new owners want to take in tenants then great, but they cannot expect these people to move all of their stuff out temporarily and the wait to see if they can move back in again; thats just nonsense.
Of course, if the tenants agree to allow themselves to be messed about then more power to them, but realistically not many people would put up with that.
I'm not sure if I have explained this properly. We (the vendor) gave the tenants proper notice that they must be out one week before closing, which was slightly more than 112 days away. There is no issue there. We are entitled to and have been promised vacant possession.
And yes, while the contracts state vacant possession they also allow for "or as otherwise agreed by the parties". So the purchaser is obviously entitled to complete the purchase without vacant possession, though they will probably be advised not to. This is what they're looking at right now. Closing the sale is our priority but we also want to incur the least amount of upheaval on the tenants possible.
Any agreement they come to won't involve us. We'll be facilitating them, no more or less. I'm just asking so that we know where things stand and can try to convenience them where at all possible.0 -
If the new owners can complete the purchase with the tenants in situ then they need to decide whether or not they want to, or if they want them out before the purchase is completed. If they are happy to have them remain then they themselves need to sit down with the tenants and discuss how they are to proceed.
At this point you are really only a messenger between the new owners and the tenants. The new owners need to get themselves sorted and figure out firstly where they stand with the terms of the purchase, and nextly how they wish to proceed from there. The ball is in their court now as to how much disruption they cause the tenants, but for the sake of the tenants I would be urging the new owner to get themselves sorted as soon as possible so that the tenants can make any necessary arrangements and be gone from the property if needs be.0
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