Council Auction

[2die4]

Hi Everyone

My name is Sean Tran. I am a newbies on IP and new to this forum.

I have found this forum very informative and spend as much time reading all the posting I can afford(time), Thanks everyone for that.

Now my question on buying a property off a vendor that have a tenant in it that does not pay rent.

1. Am I able to ask the tenant to move when I purchase the property?
2. If it is possible, what action is needed and what is the amount of time frame do I have to budget to get the tenant out.
3. Any suggestion/comment/advice on buying council auction properties?

Thank you in advance for your time.

Sean
Cheers

 

[fredo]

Is the tenant a friend of the vendor?
Is the tenant a friend of yours
You should be looking at vacant possession and settlement in 90 days
Talk to your solicitor

Fredo

 

[Sunstone]

Dear Sean,

Welcome to the forum.

1. Am I able to ask the tenant to move when I purchase the property?

With regards to this Fredo is right. All standard REIQ (Qld) contracts have a standard clause for vacant possession. It is only when the tenants details are put in that this clause is varied.

Until you settle you are in control of making sure the conditions that you put into the contract are enforced (this includes vacant possession.) Once you have settled you will have a complicated situation with regards to removing the tenant which takes time. Remember this time costs you money. You are also in a much weaker position with regards to have the property cleaned or rubbish on the premises removed.

As a rule at least one day before I settle on a property I make sure that I inspect it. This insures that it is still in the condition that I purchased it (nicely cleaned, chattels still in place including curtains etc.) and it will also allow you to make sure that the property is indeed vacant.

In the event that it is not vacant you simply contact your solicitor/conveyancer and advise him to contact the vendors solicitor/conveyancer and advise them to immediately fix this condition up otherwise settlement cannot take place until this condition is met.

On that note I would also suggest you arrange for the seller to have the property property cleaned including drycleaning of the carpets to ensure that you can have it tenanted as soon as possible after settlement. (Or if you can arrange prior access to the property to have it tenanted the day after settlement takes place.)

2. If it is possible, what action is needed and what is the amount of time frame do I have to budget to get the tenant out.

Take the first method. There is no need for you to have to take action such as what you are suggesting if you manage vacant possession right in the first place.

3. Any suggestion/comment/advice on buying council auction properties?

Government departments are not private sellers. They can be difficult to work with and can definitely be frustrating. Do not let this dishearten you but take it into consideration as they have their own agendas and timeframes. They also are typically not motivated by saving rent by the owners. (I have seen government owned properties left vacant for a year. Think about the rent loss to the government.)

If you are buying in the area I'm thinking you are, give serious consideration about the proximity of the property to the major shopping centre. Other areas in this suburb will have much slower capital growth compared to the ones in easy walking distance to this centre and the transportation hub that it is.

Cheers,

Sunstone.

 

[asy]

Originally posted by 2die4
Now my question on buying a property off a vendor that have a tenant in it that does not pay rent.

1. Am I able to ask the tenant to move when I purchase the property?
2. If it is possible, what action is needed and what is the amount of time frame do I have to budget to get the tenant out.
3. Any suggestion/comment/advice on buying council auction properties?

Hi Sean!

Welcome to the forum!!!

I will try and answer concisely...

Firstly, could you please elaborate on why the tenant does not pay rent? Is this the agreement between him and the current owner? or is the tenant supposed to be paying rent and is not? I will answer the question assuming the latter...

1: You can only ask for vacant posession if the tenant is not on a fixed term lease. This means that, for instance, if the tenant is on a lease till July, you cannot kick them out until July. (Unless they are behind in rent).

Since they are, in fact behind in rent, you can ask whether a Form 11 has been issued. This is a demand to have rent paid up to date. If they don't pay up to date, a Form 12 should be issued. This is an eviction notice, unless rent is fully paid by the end date.

Should the tenant pay up to date, the tenant will be entitled to remain in the property until their lease expires, and you should ensure that the property manager knows that you want the tenant removed at the expiry of their lease to have the appropriate notices served in a timely manner...

If the tenant is not on a lease, ask for the contract to state that you want vacant posession. (As sunstone said, by default contracts in QLD are vacant posession, however, it doesn't hurt to make sure). If you contract to vacant posession, then ensure that the tenant is OUT BEFORE YOU SETTLE. No tenant out, no settle...

I hope that answers your question, if not, please don't hesitate to rephrase, or ask more...

hope that helps.

asy