Buying a tenanted property as primary residence in Vaud

Real Estate
1

Hello,

My partner and I are interested in purchasing an apartment in the canton of Vaud. However, the property is currently rented out under a lease agreement that is renewed year after year on April 1st.

Our plan is to buy this apartment as our primary residence. We therefore intend to terminate the lease within the legal notice period in order to move in. (The property would therefore remain rented for a few months while waiting for the end of the lease.)

However, there are 2 points we need to clarify beforehand:

  • I have read in several places that the tenant can challenge our notice to terminate the lease, even if we are acting within our legal rights, and that they could succeed in obtaining an extended rental period.
  • Regarding financing, would banks be willing to approve a mortgage under primary residence conditions, or would investment property conditions apply instead? (20% down payment with pension fund pillars allowed, versus 25% without pillars and mandatory amortization over 10 years.)

If anyone has already been through this situation, I would very much welcome your feedback.

Thanks !

2

Do they have a fixed term lease? If yes, I believe your chances to end the lease in time are pretty good. Or is it a lease agreement with 01. April as only possible termination date?

anyway; take care to use the proper paper to communicate the termination. From my experience I suggest also communicate the end of the lease as soon as possible, not only 3 months before your desired date. If they challenge the termination this will be in your favour. Also it matters if the tenants are DINKS or singel parent familiy with 4 kids

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3

I would suggest that you ask the current owner to give notice to the tenant prior to your signing: i.e. sign a “Vente à terme” with the clause that the owner will give notice to the tenant not later than some date which allows you to know before getting the keys if the tenant has challenged the notice or not.

Ask for the cancellation of the contract if the tenant challenges, without any cost to you (apart from the notary). Or negotiate a lowered price in case of a challenge.

And ask to see the rental paperwork, after all you’d be “buying” the tenant as well.
You could also tell the tenant directly you’d be buying for leaving there, so you’ll have to terminate their contract. Do this before signing any official paper, while you have no legal obligation with the tenant. Check their reaction and make up your mind.

Edit: keep in mind the cantonal “service du logement” might object to the sale, I seem to remember they have a month to answer plus some more time.

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4

You will have no problem to get a loan on the place.

The hidden problem is, depending how long the tenant has lived in the place and his family situation (kids in school etc) if he asks for a extension he might very well get it.

A friend of mine bought a nice house which had a tenant for 15 years or so. The tenant objected to the termination and a court gave him 5 additional years taking account how long he had stayed in the place and that he had kids in the local school. The worst is that my friend couldn’t raise his rent and if he wanted him gone before the 5 years he had to find him a similar place for the same rent, which was like 1000 CHF a month.

Best to check how long he has been there already and what his actual rights are given the timeframe.

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