Arrears of rent when selling?

Probably a simple answer but I wasnt 100% sure

if there is arrears in rent and a property is sold, how does it all work out?

 

The solicitors will normally do a rent adjustment to the seller at time of settlement as the new owner will receive these monies from tenant once the property has settled

 

Really? This doesn't sound right..

 

If in arrears, tenant starts from day dot with new owner with a clean slate. It's up to previous owner to go after tenant for outstanding rent (chances low).

If in front, conveyancer does an adjustment to balance it up to settlement date so that both owners receive rent based on their days of ownership.

 

Most will miss this, unless the buyer actually brings it up with whoever is doing the conveyance.

Any loss is yours as DT says, any going forward once owned by someone else is theirs.

If selling agent is different to manager, or you self manage, then they wont know what the tenant is like.

 

I always recommend asking for the ledger as part of the sale process.

 

Depends if the arrears are likely to be unpaid or paid. If they are late the settlement price is adjusted for either prepaid or arrears rent. But if its delinquent perhaps you need to make a LL insurance claim.