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Selling our managed properties


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Hey everyone, looking for some advice :)

 

Myself and my mum own two properties which are managed by a property management company. We've had them for nearly 5 years, and they've always been managed because we live in the South and the properties are in the North.

 

Due to a recent change in circumstances, we're looking to sell both as my mum is currently struggling to pay her own mortgage and she's looking the recoup the investment made 5 years ago to pay off the remaining mortgage on her own home.

 

Here's the issue...

 

One of the properties has tennants in it and paying, so we're not too worried about this one just yet. But what can we do in terms of selling this one? Do we wait until the tenancy agreement is over and then we can put it on the market?

 

The second one is a right pain, and the tennant hasn't paid money personally since July. It's all come from Housing Benefits, and the management company sent money up until November to cover the voids as they're then going to claim the housing benefits back. It's currently going to court as she's saying that she doesn't want to move out, and challenging the fact they cut her housing benefits because they were paying her too much...

 

The property management company are saying they can't evict her, even though she's on a 6 months tenancy agreement, and that was up a couple of months ago. Although she has problems paying and a 16 year old, our situation isn't rosey either and we need to sell to raise money to pay our own mortgage. Are you property management company just dragging this out so we don't sell? Can we simply evict her ourselves and put the property on the market?

 

We advised the property management company 15 months ago that we wanted to sell. They advised that selling isn't the best option so they would look to find investors to take over. Nothing has come from this. What route can we take to sort this out as soon as possible? 

 

I'm not really involved and trying to advise my mum on the situation. We lost our Dad 6 years ago and invested some of the inheritance into the two properties. 

 

Any additional information please let me know.

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Paul hi

Welcome to the Hub - what a rubbish situation to find yourself in.  I am sorry to hear your story and also very sorry that you are being so ill served by what sounds like a very poor letting agency.  If what you say is true then your agents are wide of the mark on so many issues.

 

First of all the good property - it is very straightforward selling a property with tenants in situ - providing that you sell to another landlord.  All that happens is that the name of the landlord changes on the existing tenancy agreement and the landlord takes over where you leave off.  A good solicitor can easily handle the transfer and will even ensure that the rent is all sorted out so that you get the rent paid up to the completion date and the new landlord then takes over.  I have been involved with 2 such sales in the last 3 months and we regularly get asked by our landlords to source another investor to take on a property.  From a new landlords perspective they take on a letting investment that is earning rent from teh time of completion and zero voids.  The agents already have the track record of the tenant and providing all the figures stack up - everyone's a winner!  It sounds like either your agent is  a letting only company or they are not very interested in helping you.  I would seriously consider finding another agent who has an investor base who would be interested in arranging such a transfer.

 

With regard to the second property - again you are being fed bovine manure is fairly substantial proportions.  It makes no odds where the tenant is getting their money from you can still (and should still) start issuing repossession notices and Sections 8 & 21 notices should have been done months ago.  Just because they are on benefits does not protect the tenant. The tenant claiming that she is challenging her benefits is of no interest or consequence to you or your agent.  You have a commercial agreement with the tenant which primarily includes her paying  the rent on time each month and looking after the property. With well over 2 months rent owed a Section 8 Notice Ground 10 has mandatory grounds for a court awarding you the property back + Grounds 11 & 12 (which are discretionary) to add good measure and validity.  While you are at it I would pull out your agency agreement and start looking for grounds of gross misconduct and poor advice.  If you get nowhere with a formal complaint then find out which ombudsman they belong to and then go through them to remove these bozo's off the renting planet.  You might also do well to invest £75 or so to join either the National Landlords Assoc (NLA) or the Residential Landlords Assoc (RLA) as you can get quality legal advice included in your membership + assistance and online advice of how to do these things yourself if your agents continues to be so poor.

You will not be able to sell this property until the tenant is out but try and find a decent selling agent to give you good advice and support to sell it.  Go for an agent who is regulated rather than the cheapest or with the sharpest suits.  Mystery shop the agents and find out who is likely to sell your property the best way.  They all blag and talk a good story - it is finding who is one of the best that takes a little leg work - but it is worth it in the end.

 

Good luck

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Hi Paul, 

Firstly, whereabouts in the North are your properties? 

 

As Tim said, it is very easy to sell a property with a tenant in situ - In fact, it is quite appealing sometimes! 

You most certainly can get the tenants out of the second property, however as it is quite a complicated case, I would second what Tim has said about paying a monthly subscription to join the NLA - I think it's £6 but the resources on there are phenomenal! You'd get legal advice over the phone from a professional as well as legitimate eviction notices etc so well worth it. They'd sort your problem out in a jiffy! 

 

Thanks,

Steph. 

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Hi Paul, 

 

Thought I'd offer some great advice here, so just listen to everything Tim said. :-) 

 

Reading between the lines though, you may not want to get as involved in the process as Tim has advised - so I can recommend Legal4Landlords as a good firm to handle things on your behalf. I have not used them for Section 8 and 21 notices, as I tend to do these myself, but have used them for debt recovery from a tenant and court orders. Found them to be reasonably priced and generally a good bunch. 

I've no affiliation with them, just passing on a good resource. 

 

Unfortunately I doubt you'll see much money from the tenant once you have evicted them, but you should still get the housing benefit up to the date she leaves provided she is eligible for it. 

 

Personally I would;

  • Swap your current agents for a good agent in the area, where about in the North is it? Sure there will be some people on the Hub who can recommend agents, I've heard of a company called Yellow Lettings every now and then... could give them a try if you are in their area.
  • Get the tenanted property on the market to other investors for a quick sale. 
  • Speak to housing benefit office in the area to see why no housing has been paid since November - probably 'awaiting forms from the tenant'. 
  • Tell tenant that if she fills out the right forms, you won't pursue her for the outstanding rent from her.
  • Get the appropriate section notices issued to start proceedings for possession. 
  • Then put the property on the market for sale. Depending on the condition of the property you may want to do some work to bring it up to full market value, or sell it on as a project for someone. 

 

Another option to consider for the tenanted property is selling it through an auction house. You can set the guide price so you don't end up getting £12.50 for it, but you could be rid of the property within 2/3 months rather than waiting for a sale to come through. 

 

Any questions just ask or message me. Happy to help. 

Damien Fogg
MRICS CeMAP CeFA

Email: damien@theepinvestor.com

Web: www.theEPinvestor.com

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