Allowing vendor to rent place back?

[Elke]

Thoughts...pros and cons about allowing vendor to rent it back for a few months?

They havent yet bought elsewhere, they have seven kids, they are looking to rent just to vacate.

Pros
Easy as we need a tenant.
We also want to do work on the rear garage to do GF conversion so want access for planning it.

CONS
It was their beloved family home, it maybe weird and too fraught if they are still there.
What a happens if stuff goes wrong or breaks?

 

[chilliblue]

Have them arrange to delay the settlement to a date that you are happy with.

 

[S.T]

If you don't delay settlement, make sure this is treated 100% as per any other tenant.

Have PM manage, have them apply, make sure extensive condition report is done on start of lease including pictures, make sure lease dates are spot on, rent is at market etc.

One of the risks you have, is they may ask to have items fixed that they're aware of are broken and you as landlord, would need to pay.

You might be able to draw up the lease with conditions on back garage usage, or get it fenced prior to lease starting so it's all clear what they're getting in the lease conditions.

 

[Terry_w]

Be careful. There is a statutory minimum rental period, so a lease of 2 months may be 6 months. You may want an licence to occupy - check with your lawyer.

 

[neK]

One of the risks you have, is they may ask to have items fixed that they're aware of are broken and you as landlord, would need to pay.

This is probably the worse part of it.
Its also harder to find defects with all their furniture strategically placed.

Personally I would opt for delayed settlement with a specific end date, but would allow an earlier settlement if they needed it.

This way, they could find a place and execute simultaneous settlement if required.

 

[Elke]

What do u think of these terms and conditions?

This is my draft to the selling agent. Comments welcome.

The story is there's a 90m 2 shed in backyard that we want to convert to liveable residence and need to see what can be done etc, will need builders thru.

TO the agent

We are open to negotiate a win- win solution with the vendor (with 7 children) who have not yet found rental or bought elsewhere..

We are happy to agree to:
1. delay settlement to a mutually suitable time. Currently settlement is on 1 April, six weeks after the contracts exchanged.
2. with the option that they can settle earlier ( though not before the standard six weeks) if they if find a place to buy
3. The win for them is they get to stay in their place until they buy/rent to have family stability and reduce stress of finding a secondary temporary residence... The latest date for us when we want to settle would prob be around end May but that's effectively two months more for them to focus on house hunting!

The 'win' for us would be is if :
1. they granted us access to the garage to show the tradies through. We want to make it into a habitable residence, and that may involve a DA and detailed plans etc.
2. depending on the results of the DA and the timeframe, we MAY (not definite) request to put up a fence to fence off works.
3. Closer to settlement date, we would love to have access to show prospective tenants thru the house( garage off limits), by appt only with a PM (not with us personally)... Again if they are happy, we have no problem with the vendors still living there while that happened.

 

[neK]

The only part I wouldn't agree on is the commencement of works.

What if some thing happens to the vendor and they pull out of the contract (eg death)... then what happens to the money you put in for the granny flat?

I would find out from the builder how long it would take to do the conversion (maybe 2 months or so?) - i'd rather lose that rent than the cost of a granny flat.

 

[Elke]

The only part I wouldn't agree on is the commencement of works.

What if some thing happens to the vendor and they pull out of the contract (eg death)... then what happens to the money you put in for the granny flat?

I would find out from the builder how long it would take to do the conversion (maybe 2 months or so?) - i'd rather lose that rent than the cost of a granny flat.

Do you mean, you would do all paperwork but not start even the fence until after settlement? We only thought the fence so we could have it separated by when tenant moved in. I guess we could do that the week after settlement tho.

Thanks NeK.

 

[neK]

Yep, thats exactly what I mean.