Licence to Occupy

[Carryon Regardless]

I'm selling another house in Prestatyn. It is empty.

In principle I have no objection to the buyers making use of the empty property, following the exchange of contract.

As an aside it feels like their solicitor fancies himself as a litigator. His demands on me to commit to assurances about things I would have no knowledge of have been rejected. I feel he is a typical legal vulture that would complicate for no good purpose.

Anyway I have been offered a Licence to Occupy for the buyers, by the buyers solicitor, this pending their purchase on April 6th.

If a licence to occupy can absolve us of all responsibilities, as is purported here, why the hell do we use AST's?

 

[Melboy]

I cannot answer you question COR but I would guess a Licence to Occupy is not covered by the Government Housing Act for Rental / Sold Property if they, for any reason, they backed out of the deal.

I don't think I would allow anybody to occupy a property before completion unless there was some form of watertight contract in place and perhaps a money incentive for doing this. I presume you have the 10% deposit. Why can't they wait a few weeks before taking possession.

[Richlist]

I did something similar many years ago.

I was buying a flat, the sellers were moving to a house that needed a lot of renovation work and they had young children who might be affected by the dust from building/plastering etc. I agreed to let them stay in the flat after the legal completion of my purchase, rent free, for as long as they needed to complete their renovation. I new they wanted to move to their new house as soon as possible and estimated at worst it would be 2 months.

Of course, all this came at a cost to them. I bought their flat for a few thousand less than they were asking in exchange for our 'arrangement'. In the end they moved out into their new purchase after 6 weeks, everyone was happy and I'd saved a few thousand pounds on my purchase. 

If you are doing something out of the ordinary, like this, you should be able to negotiate a financial incentive to make it worthwhile for both parties. They should not expect something for nothing.

[Carryon Regardless]

Purchase negotiations were agreed 8th December last. I wanted completion in the new tax year. 

I was seeking exchange of contracts at the earliest so both parties would be confident of the transfer of ownership. At that time property prices were feasibly going to plummet, things haven't been that extreme.

Mel the idea is that we exchange contracts prior to any other activity. My understanding, maybe naive, is that we are then both committed to the completion of purchase, both date and value.

Their solicitor has been a pr*ck in my view, in expecting me to confirm things I wouldn't be expected to have knowledge of. Whilst seemingly a clever ass his questions were often too vague to have meaning. "Has any construction taken place over drainage systems"? My answer was that as all services of the estate are underground then yes, as all services will have been back filled after installation. Of course he wanted to be sure any extension wouldn't impact on any issue with sewers. My view is that if concerned get another bloody survey done. 

But an mt property serves no good for anyone. The buyers being able to decorate and fit carpets would be great advantage for them at completion. They being able to move furniture in would contradict those works some, but not my issue.

I would be relieved of security, in theory. Council tax and utilities become their responsibility. Feasibly they would have had 3 months to take advantage of, if their solicitor wasn't so troublesome. And I do understand his need to be protective of his clients interests, he has failed.

If I am at risk of possible renegotiation after exchange of contracts then it would be a no from me, but otherwise?

 

[Richlist]

We are all subjected to these questions which seem to be quite standard. So, I usually provide an equally standard reply to them if I don't have a definitive answer for e.g. 

* Not to the best of my knowledge.

* Not known, your clients survey may provide answers.

* This question is to vague to provide a detailed response.  Etc.

and if the buyers solicitor doesn't like the answers just tell him they have been answered to the best of your abilities and they are the best he is going to get from the vendor.

[Grampa]

If it looks like a duck, walks like a duck it is a duck. (Not a Licence but a AST)

A person who has exclusive possession of residential premises for a definite period is a tenant if they share facilities with an occupying owner, they will only be a licensee.

I am not a big fan of Shelter but they do have a good data base of housing law etc.

https://england.shelter.org.uk/housing_advice/downloads_and_tools/tenancy_rights_checker

Now if you do a licence when in fact if is actually a AST and you have not given all the relevant info and deposit protection stuff you dont need me to tell you the problems that could cause. 

[Carryon Regardless]

Grampa thanks.

That's where I was coming from. My solicitor assured me that a licence was not a tenancy, but we've read of even judges screwing up in court due to confusions created by out ever evolving legislation/s.

Like you I use Shelter often to confirm my position, but I feel they have recognised that we can use them to advantage and are somewhat more intelligent / discreet about how they provide information of late. In fact previously I've even printed off their info in preparation for a possible court claim, as in N Wales they are very active, and using their own sh*tty stick back at 'em would be a pleasure.

Anyways they are helping once more,

https://england.shelter.org.uk/professional_resources/legal/renting/introduction_to_security_of_tenure/what_is_a_licence#:~:text=applies to England-,Definition of a licence,be fixed term or periodic.

down to 'No Intention to Create a Tenancy', the last item would seemingly free me of the tenancy requirements. Of course being neither a tenancy or a licence could mean a revenue earner for the legal vultures in the event.

The buyers are now keen to progress after their solicitor chucking spanners at the works. 'They' are now happy to go forward in the absence of local authority information that seemed so important. Likely their solicitor was giving chance for them to get their ducks in a row.

It's only 5 weeks away till completion and I feel my advantage of an early contract is lost. I don't wish to be awkward, but now I'm in no rush to meet their desires.

 

 

[Grampa]

Thanks CoR thats a useful link my  understanding always was if the arrangement fulfils the the criteria of a tenancy it is a tenancy and you cant call it something else. However, its only an issue if it causes a problem or if there is a dispute and if a solicitor gets its wrong that what his insurance is for.

I don't dispute the info on shelters website but I could see a lot of self managing landlords interpreting that explanation in such a manner to avoid deposit protection and s21's etc and causing themselves a world of problems. 

I investigated it a long time ago trying to be clever to avoid the above and just went down a rabbit hole.