buying a house with tenants living there with out a lease

Hi all,

i'm looking to buy a property they have tenants living there who aren't on a lease as in theres no lease agreement at all. they have been there for 8 years and apparently are really good tenants (the REA says)

if i purchase it i'd want the tenants on a written lease. my question is should i get a written lease agreement before going unconditional? i'm worried that the tenants wont sign a lease once i buy it and it could be messy.

or is this just a common thing?

cheers
 
my question is should i get a written lease agreement before going unconditional? i'm worried that the tenants wont sign a lease once i buy it and it could be messy.
Yes, you absolutely should insist on being provided with a copy of the lease agreement prior to going unconditional, or insist on vacant possession.
 
thats what i thought, i've had my offer accepted and contract was signed yesterday. i have a finance and building clause in there. so i can get out with finance most likely. so whats the best way of going about it? should i just ask the vendor to sign a 6 month lease with the tenants?

if i buy it with out a written lease agreement how bad is it? if they don't sign up a new lease with me? the property is in Qld. when i saw the tenants they said they were happy to stay on and sign a new lease.
 
should i just ask the vendor to sign a 6 month lease with the tenants?
There's no point asking the vendor to sign a lease now, because you've already signed a contract. What are you going to do if the vendor doesn't produce a lease?
 
If tenants had said they will sign you have nothing to lose in asking owner to get this signed. Worst case is you settle and try to get it signed after.
 
I just hope I don't read a thread in 3mths time:

'My tenants stopped paying rent as soon as I settled and are trashing the place....Help!!!'

Get a lease, or vacant possession.


pinkboy
 
If tenants had said they will sign you have nothing to lose in asking owner to get this signed. Worst case is you settle and try to get it signed after.
I should have been clearer, perhaps. It depends whether tj22 wants to try to "manufacture a finance refusal" if the lease isn't signed. Asking for it now will make it look like you "forgot" to include a condition, and thus any clever vendor/agent will then be scrutinising a subsequent finance refusal much more closely. And be aware that trying to create a refusal based on building or finance, when it's not for reasons relating to building or finance, is extremely frowned upon.

If they're smart, they'll say "sure, as soon as you've gone unconditional, we'll give you a copy of the lease". (That's what I'd do in their position.)
 
If tenants had said they will sign you have nothing to lose in asking owner to get this signed. Worst case is you settle and try to get it signed after.

hey wylie, you don't think it's that bad? i mean its not ideal i just forgot to ask for it before i signed.

main concern is that the tenant become like some time of protected tenants where i can't kick out. if worse case scenario is i go to tribunal and have them out within 3-4 weeks i'm ok with that.
 
I should have been clearer, perhaps. It depends whether tj22 wants to try to "manufacture a finance refusal" if the lease isn't signed. Asking for it now will make it look like you "forgot" to include a condition, and thus any clever vendor/agent will then be scrutinising a subsequent finance refusal much more closely. And be aware that trying to create a refusal based on building or finance, when it's not for reasons relating to building or finance, is extremely frowned upon.

If they're smart, they'll say "sure, as soon as you've gone unconditional, we'll give you a copy of the lease". (That's what I'd do in their position.)

i'm confident i could get out on either. the agent and vendor seem easy going. i'm just trying to figure out if they say no / stall for getting a lease signed by the vendor if it's worth cancelling or continuing to buy it. was hoping a property manager could share some light with this type of situation
 
I just hope I don't read a thread in 3mths time:

'My tenants stopped paying rent as soon as I settled and are trashing the place....Help!!!'

Get a lease, or vacant possession.


pinkboy


Past behaviour is a strong indicator of future behaviours...if the tenants have been great tenants for eight years then it is highly likely that this behaviour will continue
 
Maybe its just me, but I don't see the big problem. If there's no written lease, its almost certainly just a periodic tenancy agreement on standard terms.

That said, if I wanted them out, then I would have made it clear on my sale/offer paperwork. The sale agreement should have something about what happens with an existing lease - or lack of.
 
There is still an implied lease even if it's not written.

It's a periodic lease, you can give the tenants a fixed term lease to sign or notice to vacate under periodic law.

You should wait until all conditions are met before trying to negotiate anything.
 
Past behaviour is a strong indicator of future behaviours...if the tenants have been great tenants for eight years then it is highly likely that this behaviour will continue

Only takes one person to lose a high paying job, adultery, domestic violence, family member become a junkie/sick/disabled etc, to wipe an 8 year good history on the drop of a hat.

Don't be so naive, especially in the position you hold.

Hard times hit good people in all walks of life.

pinkboy
 
Have you verified their payment history and ledger? Is it self managed or through an agency?

I bought a place with long term tenants, was told good tenants blah blah. Was also told due to privacy act cannot see their ledger.

After settlement, vendors PM handed across info to my PM to find 8 years of arrears (more arrears notice letters than payments) and a notice to vacate in place at settlement (agent also reassured me day before settlement that tenants were all fine with no problems).

My PM did some investigating and got them back on track and they are now one of my best paying tenants. Most of the problem was with the old PM.. they made it very hard to pay rent (cash or money order only), did not do inspections in years etc.
 
Most of the problem was with the old PM..

Perp: What century are they operating in?

This is so true. Some of the PMs are just ridiculous - the excuse being that they have so many properties to manage. Stressed out!! Withheld information about leaking pipes. I already knew there'd have to be plumbing work but why would I stay with them?
Have found a new property manager this week too. This one seems to have arrived in the 21st Century - can pay me fortnightly and will allow me to pay tradies myself.
Same situation, periodic lease implies roll-over of conditions.
 
There is still an implied lease even if it's not written.

It's a periodic lease, you can give the tenants a fixed term lease to sign or notice to vacate under periodic law.

You should wait until all conditions are met before trying to negotiate anything.

That's not right. A periodic lease is when there was a lease and it ran out. Then it converts to a periodic lease.
If there is no lease in the first place then there is no type of lease.

I nearly bought a place with a tenant in place with no lease. Someone I know bought it and it took them many months to get them out. Maybe the previous owner said they could stay there for nothing? The thing is you won't know until it happens. I'm surprised they found a buyer with what could be termed as squatters in there. Is there some sort of proof that they are even paying rent?
It's not always easy to get tenants out even when there is a lease. Not quite as simple as going to tribunal and giving them 3 weeks notice to get out. Especially when there is no paperwork stating what was promised to who.

I certainly wouldn't risk it.
 
You are correct if no money is exchanged.

If there is a record if payment then it is an implied lease whether it is written on paper or not.
 
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