Purchasing a property subject to lease

qwerty1991

Hi all,

I am interested in purchasing a property. However the agent has told me that the current owner signed a lease with a letting company which is not due to expire until 2018. The agreement means the owner receives 600 per month in rent and the letting company the reminder (which based on other rents in area for a similar property would be close to another 1000).

He says that the property is being sold subject to this agreement so the new owner is bound by it until 2019. I am just wondering what sort of agreement would run with the sale of a property like this and not be extinguished by a sale?

I am also wondering if I wanted to move into the property would I be unable to until the agreement is up in 2019 or can I buy the property and extinguish the lease by moving in (genuinely wish to move in myself).

Thanks if anyone can shed some light on this, I know it's a very vague query without knowing more about the agreement!

godtabh

Unlikely to get a mortgage under these conditions.

Michael D Not Higgins

The only way to get around this one is to get vacant possession and that means getting the current owner to get out of his contract with the letting agent. Otherwise I'd be walking away.

Claw Hammer

There might be ways of breaking the lease but if you take a property with someone living there, then you are deemed to have notice of any interest they have in the property. Only someone very experiened who knows exactly what they are doing should buy a property in the circumstances given here. No bank would give a mortgage unless it was a buy to let and it was satisfied with all of the paperwork.

qwerty1991

qwerty1991 wrote: »

Hi all,

I am interested in purchasing a property. However the agent has told me that the current owner signed a lease with a letting company which is not due to expire until 2018. The agreement means the owner receives 600 per month in rent and the letting company the reminder (which based on other rents in area for a similar property would be close to another 1000).

He says that the property is being sold subject to this agreement so the new owner is bound by it until 2019. I am just wondering what sort of agreement would run with the sale of a property like this and not be extinguished by a sale?

I am also wondering if I wanted to move into the property would I be unable to until the agreement is up in 2019 or can I buy the property and extinguish the lease by moving in (genuinely wish to move in myself).

Thanks if anyone can shed some light on this, I know it's a very vague query without knowing more about the agreement!

While it will be very difficult to get rid of the people living there while they have a lease the letting agent can surely be got rid of and the full rent kept by the new owner. I'd certainly not be entertaining handing over 400 euro a month to them that's for sure.

Michael D Not Higgins

Kaysen Obnoxious Recipe wrote: »

While it will be very difficult to get rid of the people living there while they have a lease the property agent can surely be got rid of and the full rent kept by the full owner. I'd certainly not be entertaining handing over 400 euro a month to them that's for sure.

Read it again, it's handing over 1000 a month. Who'd sign this crazy deal in the first place?

Michael D Not Higgins

Michael D Not Higgins wrote: »

Read it again, it's handing over 1000 a month. Who'd sign this crazy deal in the first place?

Yeah missed that, what a crazy deal.

I wasn't suggesting anyone would buy the place but more asking a question out of interest if you did buy a place with an outstanding lease. Yeah you are bound by the lease to the tenants but surely anything with the letting agent can be torn up. Smells of the letting agent making a plan in the house they can rob the new owner if someone was stupid enough to buy it.

Claw Hammer

Kaysen Obnoxious Recipe wrote: »

Yeah missed that, what a crazy deal.

I wasn't suggesting anyone would buy the place but more asking a question out of interest if you did buy a place with an outstanding lease. Yeah you are bound by the lease to the tenants but surely anything with the letting agent can be torn up. Smells of the letting agent making a plan in the house they can rob the new owner if someone was stupid enough to buy it.

What the o/p says is that the owner signed a lease with the letting company, not just entered into an agency agreement.

zac8

Such a property is only really of interest to cash buying investors. I can see why leases like this might have come about - it was probably signed back in 2012/13 when the rental market was very different.

April 73

You should get your solicitor to look at that agreement before you can make any decisions. No-one knows what exactly might be in it or if there are any break-clauses in it.
If the seller wants to sell he may as well provide this contract up front.
Until you see the contract it's only speculation as to what might be possible.

qwerty1991

Thanks for your responses. Yes I have left a message at the auctioneers looking for a copy of the agreement. I'm guessing it's something like those 10 year leases Dublin city council give out . Will let you know generally what the deal is, it seems a bit strange!