Q. I have just exchanged on my property and the buyer has said that the completion date may be delayed by around five days due to funds being moved from his overseas accounts. The slight delay is fine by me except he is buying it with the tenants in occupation and when the sale was first agreed I arranged for my agent to serve a section 21 on them to terminate the contract by the original completion date, the buyer was then going to issue a brand new contract with them on completion so they could carry on renting the property via him as their would be new Landlord. What happens if he does need the five day extension in terms of them no longer having a contract with me? I will still be the legal owner so I’m guessing I will need to organise something to protect myself if this does occur right? Please help!
A. This is a rather unusual situation given it’s still not set in stone either way as if you do complete on the original date an extension of some sort to cover the five days will not be required anyway. As you mentioned – you are still the legal owner until the property legally completes so it is up to you to make sure that you are protected and this five day period is properly covered otherwise you could find yourself in seriously hot water. The best way forward is to talk to your solicitor, they will likely suggest drafting a ‘licence to occupy’ this would be the simplest way to protect you if the situation does happen to arise. You would need to get your tenants to sign this prior to the five day periods commencement. It’s worth having a chat to the tenants too, to fill them in with the situation. They will be liable to carry on paying the rent to you until the property legally completes at which time the buyer would then take over as their new landlord and the responsibility would then lay with him to organise a brand new AST (Assured Shorthold Tenancy Agreement). As we discussed a couple of weeks ago selling a property with the tenants in occupation is always possible and often a very good idea as it protects both the buyer and the seller from void periods but when you have a small situation like this one arise, don’t cut corners or take chances, make sure you get the correct legal advice and documentation in place to avoid drama later.