Buying Property with Tenant as PPOR

[citystar]

I am considering purchasing a property as PPOR in Queensland as a first home buyer, the current owner has just signed a 12 month lease agreement with the current tenant. Would I require adding a term/condition in the Contract of Sale or just provide the tenant enough notice in writing once settlement has been completed?

Regards,


Daniel

 

[Ausprop]

be careful - not sure of Qld situation but in WA that tenant isn't going anywhere regardless of who buys or sells the property

 

[MissMuffitt]

When we purchased out PPoR 18 months ago here in Gladstone. The guy we bought it off wanted to rent it back off us for 6 months.

I really didn't want to do that as I wanted to move in ASAP to start our new life, so in the contract we had a clause that said either of us (Him or use) could give the other a months notice. So right after settlement I got the RE to write an official letter saying our circumstances has changed and we wanted him out in 28 days.

He was royaly Pi**ed off, but it was in the contract...

Anyway, that is my story for the day

I wish you luck...

MM

 

[wylie]

You will have to wait for the lease to finish unless you can sweeten the deal for the tenant by paying say $1000 to them if they move by a certain date.

I believe there is a time frame during which you must move in yourself or risk paying higher stamp duty (?). You need to make sure you get this all straight or you risk it costing you money.

Wylie

 

[citystar]

Wylie, unfortunately I think you are correct that the tenants have all the rights to stay for the whole lease agreement. I was hoping that buying the place would break the existing agreement because it was not between the tenant and myself however advise shows otherwise. They may be willing to move out earlier, however as you stated I may have to compensate them to sweeten the deal.

I am going to try and avoid this otherwise I may have to find another property to purchase which would be a shame because the value in this area is going to increase. I am going to have a word with the real estate agent and find out if the current owner is prepared to discuss reducing the lease with the tenant so that I can satisfy FHOG and Stamp Duty concessions before signing the Contract of Sale.

The tenant has all the right to stay put, if they decide to do this there are plenty of other opportunities available.

Daniel

 

[alexlee]

It's not the owner you have to convince. It's the tenants.

 

[marg4000]

If you purchase the property you will have to honour the lease. You will also have to check if this affects the amount of stamp duty you pay (can you claim PPOR concessions?) and also how it affects the FHOG.
Marg

 

[pulse]

Daniel, it is actually not your problem, it is the vendors problem.

Put a clause for vacant possession in the contract and then the vendor has to negotiate with their tenant to end the lease at settlement. If it is not vacant you do not have to settle or can sue them for breach of contract.

Stop worrying and get the vendor worrying..

Pulse

 

[Debt Junkie]

Put a clause for vacant possession in the contract and then the vendor has to negotiate with their tenant to end the lease at settlement.

That's what I did recently, although I'm not sure it is the same scenario, as the existing tenants weren't on a lease.

In my case, there were rules about how much notice the vendor had to give their tenants - as a result, I asked for, and got a 60 settlement. Perhaps you could do the same? I'd definitely be checking it out with your REA.

DJ

 

[citystar]

Good news, I spoke with the real estate agent and they have advised the tenants of my intension to move in earlier then expected. The tenants have agreed to sign a new lease agreement that finishes five months after settlement date. This has all been included in the Contract of Sale which means I will rent the property for five months before moving in as PPOR within the six month period after settlement to satisfy FHOG and Stamp Duty concessions.


Daniel

 

[wylie]

Hi Daniel.

That is really good news, and the tenants must have been happy to do so, which is great. Did you have to sweeten the pot with the tenants?

Wylie