Q. I am in the process of selling my rental investment and have tenants in occupation that can be served two months’ notice at any time, the tenants were also aware when they moved in that I have the place on the market too so all good on that side. However my agent tells me that the buyers are now pressurising us to serve the notice on the tenants even though we have not exchanged. Given we have already lost one buyer at the eleventh hour previously and the apartment then became vacant as I had served notice a little prematurely I am reluctant to serve the notice until we actually exchange this time and the sale becomes legally binding. Do you think I am being unreasonable and if so are there any other solutions you can offer to ensure I don’t end up losing the buyers a second time and having a vacant property with no rental income? Financially I cannot withstand another disaster like that again.
A. We have two points to take into consideration here, the first is that you protect yourself from losing your rental income, the second is that you retain your buyers and offer a reasonable solution as they too can become frustrated as from their end they are committed to the purchase and can begin to question your intent to actually proceed with the sale when you continue to delay serving notice on the tenants. I think the easiest solution all round is to get your solicitors to put some kind of mutual agreement in place. Often in this type of scenario in return for the notice being served prior to exchange the sellers solicitor can arrange that the buyer agree to deposit two months’ rent with their solicitor and as long as all goes well this will credit against the final purchase price. However if the buyers were to withdraw from the purchase for any reason at all they would forfeit the funds and the deposit would be transferred over to you for loss of income. That would at least cover your rent for another couple of months to allow you to either find another buyer or re-let the apartment leaving you less exposed financially. As long as both you and the buyers are on the same page this would be a reasonable solution to push things along in the right direction.