Q. I have just exchanged contracts on my apartment and really looking forward to moving in but having found out that the tenant’s that currently reside in the apartment are struggling to find somewhere to move to and I have a large overlap on my current rental as the sale moved quicker than anticipated I’ve decided that I would be quite happy for them to stay there for a few extra weeks to help us both out, that way I don’t have both rent and mortgage to pay. However having discussed my intentions with my solicitor she has informed me that this will not be possible as I only have a residential mortgage which will not allow tenant’s. Is this true and if so is there any solution, it’s not as if I am keeping them for a long period of time it will only be a few weeks?
A. This is absolutely true given the mortgage application was for a residential mortgage, the offer will only be valid with vacant possession. From the seller’s side his solicitor would have insured that a Section 21 was served on the tenants usually as soon as exchange of contracts has taken place as this is when the sale becomes legally binding. Once the tenant has vacated the property on the said date the sellers solicitor will then usually serve Notice on you the purchaser of Vacant Possession, you then have five working days within which to complete on the property. Until they receive confirmation that the tenant has vacated they cannot serve the notice. That of course is from the sellers side but you’re solicitor will also have further legal obligations as she is not only acting for you as the purchaser but also on behalf of your lender and without any doubt if a residential mortgage has been arranged she will not be able to complete unless she is served the notice of vacant possession from the sellers solicitor. She has a legal obligation to follow this through. Sadly as much as this seems like a great idea for both yourself and the tenant’s currently residing it is not going to happen. The Lenders have a totally different lending criteria for a buy to let mortgage versus a residential mortgage with more favourable rates also on a residential mortgage and they rely on the solicitors to make sure that the mortgage system is not being abused. Of course later down the line if you wanted to rent the property out, you can approach the lender and ask for their permission to do so which is never usually refused.