在澳大利亚 I need some advice regarding a property purchase. Property - semi-detached house Bedrooms - 2 Condition - average needs internal reno to modernise Street - one of the best in suburb Location - excellent Close to schools - yes Transport - 50m The pool at of an IP needs to be resurfaced (or so the pool doctor says), the cost was estimated to be $10K ($10,000), after recoverying from my impresssion of a cat coughing up a fur ball, it just seems far too much. Its just a standard poo
I just wanted to know what happens if you purchase a property which has tenants in place?
I know that you, as the new owner, need to honour the lease in place, but on settlement when you become the new owner, i assume you are entitled to the tenants deposit if they default on their rental?
Also, when taking on existing tenants, i guess its very important to make sure you get landlord insurance from the day of settlement? The last thing you would want is a disgruntled tenant trashing your property!
bonds are generally held with a government agency (in Victoria it is the RTBA) and it is lodged against the property rather than against the landlord so it automatically transfers across with any change of ownership
I believe that you would take out landlords insurance along with your building insurance from the day the contract is signed, rather than from the day of settlement.
I cant speak for other states, but when we bought our IP that came with tenants, we had to honour the existing two year lease. It was long afterwards that i discovered we can charge them for water usage but that wasnt in the lease. No doubt you will have to be satisfied with the tenants and their lease as well as the property before you go ahead and purchase it.
This has also been on my mind Robbiep, so thanks for starting the thread.
How do you check at settlement that everything in the property is in good working order at settlement as there is still someone living in the property?
Or do you request to see the property condition report at the start of the tenancy so then you claim any damages from the tenant?
What would be the usual to ask from the REA? Is it usual to ask to see the actual lease agreement and any other previous communications with the existing tenant or just take what the REA says is true? Or maybe to put in the conditions that it's subject to buyers satisfaction of the current lease agreement. Being in Perth, I don't think I get the benefit of the cooling off period where I may just lose 0.25% of the deposit.
I recently purchased a property that had existing tenants. They kept the place neat and tidy and were paying their rent. So was a good sign so we let them stay.
It wasn't under a lease however on a week to week. When we became owners we wanted them to sign a 6months lease with our property manager. They have now moved.
The previous property manager had to send the bond to the new property manager and send us an adjusted rent from settlement.
Hi. I always ask the Real Estate agent to see the payment schedule to make sure the tenant is not behind in the rent. I also ask to see the lease.
Make sure the leasing agent knows about the sale. I had one with the SAME agency but the sales team didn't speak t the rental team. Took a while to get my money back that they paid the previous owner (won't make that mistake again). If you want to change PM's give them notice and get new agent to change over. If not on a fixed lease and rent is too low (as it often is) give the required notice on settlement. Same if you want them to sign a new lease.
You need to do a pre settlement inspection in the few days before settlement. Arrange it with the PM in advance so there are no problems.
The lease from NSW Fair Traiding appears to indicate that the sale of the premises can be grounds for the landlor breakin the lease (last page).
It's interesting that it permits water to be charges to the tenant only if water saving devices are installed.
geoffw said: ↑
The lease from NSW Fair Traiding appears to indicate that the sale of the premises can be grounds for the landlor breakin the lease (last page).Click to expand...
That seemed very unusual to me, so I had a squizz at the form you referred to.
On the 2nd last page (the last page is simply the execution page) in the bottom left hand corner it simply says that ;
3. Ending a Fixed Term Agreement
"If this agreement is a fixed term agreement it may be ended by the Landlord or the Tenant by giving written notice of termination. The notice may be given at any time up until the end of the fixed term but cannot take effect until the term ends...."
My interpretation from that is that regardless of who owns the property, a new Buyer must respect the Lease term - if it fixed - that the existing Owner has entered into with the sitting Tenant.
No Govt real estate authority would put up with some Buyer swanning in and saying to a Tenant - "Hi, I'm the new Owner, get out."
OK, that's fair.
I had thought that there was an exemption if the owner wanted to move into the premises, which is what I was looking for but couldn't find.
It's worth while for the OP to get a copy of the lease just to find out what their obligations and rights are (leases according to Dazz, 101).
Robbie, ensure that the agent is aware of the new ownership, especially if you choose to change agents. I didn't when I bought a property with tenants- and had to jump through all sorts of hoops to get the rent back from the old owner.
I found what I was looking for. In Victoria at least the landlord can give 60 days notice that they or a member of their family intend to move in.
There are provisions for the seller to terminate a lease bu I'm not sure if a buyer has the same right.
A landlord can give 120 day notice to end the agreement without reason- though interestingly the tenant can appeal this if they think it's just because of an argument.
I know that this is not what the OP was asking- sorry Robbie. It was just something I wanted to know more about myself.
Nice one Geoff. I read the clause, and surprisingly it didn't mention that it didn't apply to fixed term Leases, so it looks like it stands. Well done.
Some of those other many clauses make for horrific reading if you are a Landlord. You've literally got to cross your fingers and hope like hell you haven't got a Tenant who knows the Law, or has a mate working at the Tenants Union. Heaven help you.
When is the new owner entitled to the rent? From contract date, settlement date, or is it up for negotiation?
The new owner can start collecting rent from settlement date.