holidayhomeinformation.co.uk

Holiday Homes- Legal Issies

PURCHASE

• Would normally be conducted as a purchase of private residential property.
• Whether or not you are taking a mortgage, the property should be surveyed and valued. Would suggest a "House Purchaser's Report" as a minimum.
• Allow your solicitors to carry out a full range of searches.
• If the property is being purchased fully furnished, you will need to ensure that there are the relevant certificates etc for all appliances that are included in the sale and that soft furnishings comply with the fire regulations.
• If the property is being purchased as "a going concern", your solicitor is to ensure that either there are no tenants in occupation at the time of completion so the property is sold with vacant possession or that you are fully aware of the terms on which the property is occupied and any deposits taken against future bookings are handed over on completion to you.
• You may need to reimburse the cost of forward advertising in local holiday guides etc.

SALE

• You can sell either with vacant possession with the property unoccupied or as "a going concern" in which case you will have to provide details of the arrangements under which the property is occupied, apportion rents paid for a period partially before and partially after completion and deal with the handing to the buyer of any deposits taken against future bookings.
• If you are including furniture and domestic appliances in the sale, you will need to provide all relevant certificates and an electrical inspection certificate and other paperwork which will be required when Home Information Packs are introduced in June of this year.
• You may be entitled to reimbursement of the cost of future advertising in local holiday guides etc.
• It is always helpful with a view to ensuring speedy conclusion to have all relevant paperwork in the hands of your solicitors as soon as a sale is negotiated so that they can be sent to your buyer's solicitors as part of the contract documentation. Most importantly, it is important if the property is subject to mortgage that you have provided details of your mortgage account to your solicitors to enable them to obtain the title deeds etc.
• You will need to know the date on which you would like to complete your sale so that this information can be made available to your buyer at an early stage.

MORTGAGES

There are a wide range of "Buy to Let" mortgages available, some at fixed rates, and which can be accessed most easily through mortgage brokers and your solicitors will be able to recommend you to a reputable firm of brokers for this purpose.

JOINT OWNERSHIP

Properties can be owned jointly at law at the present time either on a joint tenancy or a tenancy in common. The probability is that the home that you are letting for holiday purposes is not your principle private residence and you should discuss the manner of its ownership with your solicitors at an early stage so as to ensure that it is owned in a way which is most efficient for inheritance tax and capital gains tax purposes.

WILL

Whenever you purchase a property, you should always re-examine the terms of your Wills to make certain that they are completely current and as tax efficient as they can reasonably be and your solicitors will be happy to advise you about these matters.

FINANCIAL ADVICE

Always remember that a holiday home is an additional asset and you should consult with an Independent Financial Advisor when acquiring additional assets and again your solicitors will be able to recommend you to reputable firms to enable this advice to be taken.

FURTHER LEGAL REQUIREMENTS

• Pursuant to Schedule 1 of the Housing Act 1988 the occupancy of a dwelling for the purpose of a holiday does not constitute an Assured Tenancy or an Assured Shorthold Tenancy for the purposes of the Act. Such a holiday letting does not confer any rights of occupancy, or security of tenure, as the occupant would otherwise have under the Housing Act 1988.
• This does not preclude however the option for an owner to grant either an Assured or an Assured Shorthold Tenancy during part of the year when the property is not let as a holiday home e.g. in off-season.
• If an Assured Tenancy for a term not exceeding eight months is granted and; "(a) Not later than the beginning of the tenancy the landlord gave notice in writing to the tenant that possession might be recovered on this ground; and (b) At some time within the period of 12 months ending with the beginning of the tenancy, the dwelling house was occupied under a right to occupy it for a holiday." Then at the expiration of the tenancy the owner/landlord would have a mandatory ground for possession if the tenant failed to vacate.
• Alternatively, an Assured Shorthold Tenancy can be granted for, say, six months, but care must be taken to serve the correct Notice on the tenant to bring the Tenancy to an end. If the Tenant of a dwelling let on a tenancy failed to vacate then Court proceedings would be required to recover possession.

Care must be taken when granting any Tenancy and legal advice is recommended to avoid pitfalls.