House being sold and I'm the tenant... what to expect? Advice please?

Hi,

Wanted to get a bit of advice from the "other side of the fence" as it were...

I currently rent a property, however have just been informed that the property is going up for auction in the very near future (about a month), so basically, no notice at all.

This is not a situation I have ever had to deal with before, so I'm not sure on how this is going to affect me etc.

There is no lease involved, never has been, it's a private rental.

I'd say I pay a bit (maybe a fiar bit) below market rate, the current owner believes that having a quality long term tenant is better then higher rent on shorter term leases / bad tenants, I've been here say 3 years, previous tenant was here for about 5 years or so. I'm an awesome tenant btw. :D

The current owner I believe is angling for a sale with the property currently tenanted. How does this work?

My expectation is that the new owner will look at either:

a) Renovating (Most likely, say 70% chance)
b) PPoR (less likely, say 10% chance)
c) Rent Increase (Quite likely, say 20% chance)

At the moment, I'm hedging my bets and have already started the process of looking at finding another rental or purchasing a place, as I probably don't want to be left at the whims of the prospective new owner.

(Note: I now looking at purchasing sounds a bit rash, but I've been doing research for a while, and well, would have preferred under my own terms, however this may be an impetus I need, and I have a place to stay for the next few months if required if buying.)

What kind of obligation am I expected to be under, given that the property is being sold out underneath me?

Am I expected to give notice independently to the owner? Or does the fact that the property is being sold negate that responsibility?

If you were the purchaser of a property currently leased, what would you expect? / what would be normal?

Part of the ToC to be vacant upon settlement date if required?

Any advice or opinions are welcome.

My apologies for the vagueness, as above, not something I've ever had to deal with, and never looked into before. It's also all come as a bit of a shock / rush, as my notice of selling was basically from the status quo to set auction date in one phone call...

C'est la vie.
 
I currently rent a property, however have just been informed that the property is going up for auction in the very near future (about a month), so basically, no notice at all.
Well not entirely, as you have been given 4 weeks notice of an intended auction. If the property is sold on the day, with vacant possession, then you have at least another 4 weeks before settlement to get out.

There is no lease involved, never has been, it's a private rental.
groans...... I'm not going there. I'll answer the rest of your Qs as though you did have a lease.

I'd say I pay a bit (maybe a fiar bit) below market rate, the current owner believes that having a quality long term tenant is better then higher rent on shorter term leases / bad tenants, I've been here say 3 years, previous tenant was here for about 5 years or so. I'm an awesome tenant btw. :D
The owner is doing himeself a disservice in my opinion. I think an awesome tenant is one who pays full market rent and stays a long time ;)

The current owner I believe is angling for a sale with the property currently tenanted. How does this work?
No. I think you are mistaken. If that were the case, a copy of the resi lease would be included as part of the contract of sale. Also the LL would want to show a decent market rental not your 'mates rates' one to show to intending purchasers. Low rent being paid = questions in the minds of intending purchasers.

My expectation is that the new owner will look at either:
a) Renovating (Most likely, say 70% chance)
b) PPoR (less likely, say 10% chance)
c) Rent Increase (Quite likely, say 20% chance)
Your expectation is irrelevant here - too many variables to make an educated guess. It is being sold - that's all you know. There is no lease. Whatever the scenario - you are probably gone except in the case of an investor who does not want to do a reno but who will want market rent and who also wants to rent to you - pretty low odds on that outcome I'd think.

At the moment, I'm hedging my bets and have already started the process of looking at finding another rental or purchasing a place, as I probably don't want to be left at the whims of the prospective new owner.
Good idea

(Note: I now looking at purchasing sounds a bit rash, but I've been doing research for a while, and well, would have preferred under my own terms, however this may be an impetus I need, and I have a place to stay for the next few months if required if buying.)
Probably an even better idea.

What kind of obligation am I expected to be under, given that the property is being sold out underneath me?
The expectation will be to make the place available for Opens for 30 mins on a Saturday and then to vacate prior to settlement.

Am I expected to give notice independently to the owner?
If you want to move out prior - yes.

Or does the fact that the property is being sold negate that responsibility?
No, not at all.

If you were the purchaser of a property currently leased, what would you expect? / what would be normal?
I'd expect vacant possession in all cases unless a copy of a resi lease was attached to the contract.

Part of the ToC to be vacant upon settlement date if required?
Yes.

Find a place to rent or buy now would be my advice FWIW. Cheers, Alan
 
Which hat are you wearing at the time ??

One could reply to this thread in any number of ways.


If I was a fellow Landlord, I'd say ;

1. You aren't an awesome Tenant....cos you aren't a Tenant....certainly not without a Lease.

2. You'll be completely in the dark cos I wouldn't share any details with you.


If I was a fellow in your situation, I'd say ;

1. Get a copy of the sales contract if you can, to see what sort conditions the house has been sold under. If the Seller has promised the Buyer vacant possession without consulting you prior, you can make life very difficult for them......but I'm not going to go into details cos you'll be able to cause merry hell for everyone else.

2. Pack up and go now. You obviously aren't willing or able to pay fair market rent, and haven't for a good while, so go find yourself another sucker Landlord to subsidise your lifestyle.


If I was the PM, I'd give you written notice to bugger off ASAP.



P.S. Given you don't have a Lease, and have consistently paid well under market rental rates for 3 or so years......what exactly gives you the impression that you are an awesome Tenant ??

Every Landlord has different criteria for judging whether their Tenant's are good or not. Of the four most important criteria for me, you fail all four miserably....

Have you ever thought that your current Landlord is selling because they cannot afford to keep you anymore ?? Perhaps they've just been hit with a big Land Tax bill that is larger than the total rent you pay them and they've decided to dump your home as an "asset".
 
(Note: I now looking at purchasing sounds a bit rash, but I've been doing research for a while, and well, would have preferred under my own terms, however this may be an impetus I need, and I have a place to stay for the next few months if required if buying.)

What kind of obligation am I expected to be under, given that the property is being sold out underneath me?
.

Thought about buying the place yourself? One of our tenants ended up buying our apartment.

As for obligations, the agents need to give you 24 hour notice of inspections
http://www.consumer.vic.gov.au/CA256902000FE154/Lookup/CAV_Publications_Renting/$file/privacyaccess.pdf

Cheers,

The Y-man
 
Despite everything, you are entitled under law to adequate notice to leave the premises. I believe the time limit in Victoria is 60 days.

Check with the rental tenancies board, I believe you may also have to give permission for the "open house" inspections that normally accompany auctions. You are under no obligation to "tidy up" before inspections. I suggest you stay to ensure your own possessions are safe.

Althought there is no lease and you are paying below market rent (by agreement), you DO have rights and are entitled to take advantage of them.

Make enquiries with the relevant authorities and ensure you receive due notice etc.
Marg
 
I think people are possibly being unduly harsh by dismissing you as a bad tenant because you're paying below market.

We are in the process of buying IP4, with an awesome 3yr+ tenant. He's paying $100 below market per week, but he keeps the place beautifully and pays his agreed rent on time. He does everything a good tenant should.

So why is he paying $100 below market? Because the landlord is an accidental landlord who doesn't know/hasn't kept up with the market. Not the tenant's fault. IMO he is not obliged to offer more money if it is not requested. We think he's an excellent tenant, and if he's willing and has the income to be able to come up to market, we'll keep him on.
 
The fact that a tenant was paying below market rental is totally irrelevant when it comes to his rights regarding tenancy.

As said, the landlord was happy to accept that rent.
Marg
 
Well not entirely, as you have been given 4 weeks notice of an intended auction. If the property is sold on the day, with vacant possession, then you have at least another 4 weeks before settlement to get out.

Ok, that makes sense. I'll still aim for moving prior to auction date.

groans...... I'm not going there. I'll answer the rest of your Qs as though you did have a lease.

Thank you. I just meant as in we have never had a written agreement.

The owner is doing himeself a disservice in my opinion. I think an awesome tenant is one who pays full market rent and stays a long time ;)

:D Of course.

Find a place to rent or buy now would be my advice FWIW.

Yes, most definitely, in between posts, I've been just to see a mortgage broker.
 
1. Get a copy of the sales contract if you can, to see what sort conditions the house has been sold under. If the Seller has promised the Buyer vacant possession without consulting you prior, you can make life very difficult for them......but I'm not going to go into details cos you'll be able to cause merry hell for everyone else.

Thought wouldn't even cross my mind.

2. Pack up and go now. You obviously aren't willing or able to pay fair market rent, and haven't for a good while, so go find yourself another sucker Landlord to subsidise your lifestyle.

Harsh.

P.S. Given you don't have a Lease, and have consistently paid well under market rental rates for 3 or so years......what exactly gives you the impression that you are an awesome Tenant ??

a) If the landlord wanted to implement a lease, they are/were more then welcome to do so. Takes two to tango, no?

b) I said "I pay a bit (maybe a fiar bit) below market rate", to be honest, I'm not entirely sure what is current market rate in the area. You've extrapolated this to "well under market rates" with absolutely no knowledge of any more details.

c) Because I am an awesome tenant? There's more to it then just paying the rent you know...

d) If you don't believe your own propaganda, who will? :p

Every Landlord has different criteria for judging whether their Tenant's are good or not. Of the four most important criteria for me, you fail all four miserably....

Genuinely curious, what are the four most important criteria for you?

I may well be a landlord in the future, so would be interested in your opinion.

Have you ever thought that your current Landlord is selling because they cannot afford to keep you anymore ?? Perhaps they've just been hit with a big Land Tax bill that is larger than the total rent you pay them and they've decided to dump your home as an "asset".

Well, no I haven't. I have actually been informed about why they are selling.

Regardless, is it my prerogative as a tenant to ask for rent increases or be concerned about the owners financial circumstances?

Do any of your tenants approach you to pay more rent?
 
Check with the rental tenancies board, I believe you may also have to give permission for the "open house" inspections that normally accompany auctions. You are under no obligation to "tidy up" before inspections.

The owners have decided on dual weekly inspections.

The house will be of it's usual level of cleanliness, so no stress about having to "tidy up".

I suggest you stay to ensure your own possessions are safe.

For various reasons, the impact means I will be well into packing prior to the first inspection.

Althought there is no lease and you are paying below market rent (by agreement), you DO have rights and are entitled to take advantage of them.

Make enquiries with the relevant authorities and ensure you receive due notice etc.

Yes, I will do. My intention is to make this as painless as possible for all parties concerned.
 
I think people are possibly being unduly harsh by dismissing you as a bad tenant because you're paying below market.

So do I. :p

However, I can perfectly see how people are of that opinion, and they are well entitled to it.

I'm curious as to the stance I would take if I was in the owners shoes and how I would deal with tenants and what my viewpoint would be. I'll brun that bridge when I get to it I guess.

We are in the process of buying IP4, with an awesome 3yr+ tenant. He's paying $100 below market per week, but he keeps the place beautifully and pays his agreed rent on time. He does everything a good tenant should.

So why is he paying $100 below market? Because the landlord is an accidental landlord who doesn't know/hasn't kept up with the market. Not the tenant's fault. IMO he is not obliged to offer more money if it is not requested. We think he's an excellent tenant, and if he's willing and has the income to be able to come up to market, we'll keep him on.

Out of curiosity, if the tenant is paying $100 a week below market, would you look at increasing the rent straight up? Gradually? Slightly below to hold onto an excellent tenant, or other?
 
All in all, thank you for responses, most appreciated and am genuinely interested to hear them from your perspectives. :D

Note to self: Don't be so argumentative and play devils advocate. :p
 
Out of curiosity, if the tenant is paying $100 a week below market, would you look at increasing the rent straight up? Gradually? Slightly below to hold onto an excellent tenant, or other?

If I bought a place where the tenant was paying $100pw below market and didn't have a fixed lease in place, I'd refuse to renew the lease (but since there is no lease, ask for vacant possession), then re-advertise at the market rent after you move out.

As a new owner I wouldn't know you from a hill of beans. So how do I know you're an excellent tenant? What are you doing for the landlord? At $5,000 a year difference, you'd better be renvoating my property for free.
 
As a new owner I wouldn't know you from a hill of beans. So how do I know you're an excellent tenant? What are you doing for the landlord? At $5,000 a year difference, you'd better be renvoating my property for free.

In this case, the tenant has done a lot of work for free. And it's a small community - everyone knows (of) everyone.
 
Out of curiosity, if the tenant is paying $100 a week below market, would you look at increasing the rent straight up? Gradually? Slightly below to hold onto an excellent tenant, or other?

No. We've had the agent sound him out early, so he has time to adjust his budget, and we'll give him $5 below top market the first year (because we don't have to pay a finder's fee for him). But he has to pay market from the start. We think he's a good tenant, but it's still an investment and it has to pay its way.
 
Am I reading this right ?? Deejay is Red Star's Landlord.....or did this convo get side tracked ??

No, I meant in my example of the IP we're buying, with a below-market tenant. Similar situation to Red Star's but not the same one. (Red Star's is going to auction, ours is private treaty; and I gather Red Star's rent is not as far below market as ours).

I didn't intend to side track - I was making the point (in response to several others) that low-paying tenant does not necessarily mean bad tenant - it just means the owner is a poor business person. In our case, the soon to be ex owner is an accidental landlord who doesn't know the market. The tenant, in paying the agreed rent on time, not making unreasonable demands, and keeping the place well, is doing nothing wrong. The onus is on the landlord to review the rent IMO.
 
Top