Can you explain why, thatbum?
Ingoing condition report
- Thread starter Shaneelastic
- Start date
Basic contract principles. When you a property, you buy it at its condition at the date of contract/settlement - not some historical point in time when the current tenant moved in.
Even after settlement, you don't have an actual lease with the tenant - the old owner did. Through various state tenancy legislation, the tenant can "vest" their tenancy with the new owner, but its different from actually having a pre-existing lease agreement.
So I don't see any legal avenue for a new owner to demand a better condition than what was at settlement.
Now there might be some quirks in some states that change this position, but I don't know of any. Certainly in WA it would be nearly impossible for a new owner to get a tenant to fix things from the commencement of the tenancy.
And this is putting aside all the practical difficulties like proving the historical condition of the property as well. (Hint: A property condition report is probably hearsay without the person that made it)
So by your reasoning a tenant can essentially trash a property after it's been sold and not face any action?
Also this type of property condition report was signed by all tenants with full colour photos also.
Are you a lawyer ?
Also this type of property condition report was signed by all tenants with full colour photos also.
Are you a lawyer ?
Also property condition reports are done by the managing agent for this property in question
Would s 5 of Victoria's Residential Tenancies Act 1997 constitute such a quirk?
No, by my reasoning if the tenant trashes the property before settlement, then its the previous owner's problem to fix or claim. If its trashed after settlement, its your problem to fix or claim.
Mostly irrelevant.
Yes
That's interesting. This section might actually help - but it doesn't work by itself and there is nothing in that act that makes it work. The section is actually generally used for the switching of tenants.
The missing link is probably some sort of assignment or transfer of landlord rights and obligations in the sale contract.
The property was purchased subject to the tenancy being in place and as you inspected the property you inherited as is.
However if there is malicious and or accidental damage I suggest you obtain a good landlord policy that will cover you in the event that your bond is not negotiated or you lose out at vcat. Considering the condition report is detailed you should be getting back the property as tenanted aside from fair wear and tear and any neglect on the previous owners part for not maintaining the pool.
If the tenant signed a separate clause staying acceptance for full upkeep of the pool you may have a case however if the previous owner did not maintain the structure and operations of the pool you have inherited the problem.
Good luck
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Are you a lawyer, that you can so confidently contradict a lawyer, and state that no such link is required in the sales contract?
In the way that a tenant and his right to continue to occupy the property is protected by a fixed term lease from changes of owners and the whims of new owners/landlords etc, the rights of the existing landlord and subsequent landlords are also protected by the continuing existence of the lease document. Remember the tenant agrees to abide by the terms of - the lease, meaning the document and legislation reinforcing it tell the parties what their obligations are. A breach of the lease is still a breach of the lease irrespective of changes of landlord. Busloads of hell's tenants would've driven through a loophole like this if it existed.
If a pre-purchase inspection shows some unfulfilled obligations of the tenant, or damage, then the tenant's obligations to abide by the terms of the lease don't evaporate with a sale, they just become the problem of a new owner to enforce or negotiate. These sort of problems often become a factor affecting buyers' offers, or something to be completed by the vendor before settlement.
Cheers
crest133
If a pre-purchase inspection shows some unfulfilled obligations of the tenant, or damage, then the tenant's obligations to abide by the terms of the lease don't evaporate with a sale, they just become the problem of a new owner to enforce or negotiate. These sort of problems often become a factor affecting buyers' offers, or something to be completed by the vendor before settlement.
Cheers
crest133
I will let u all know the result.
The legal forms of authority to sell the property must state there is a tenancy in place. In addition to this the contract of sale prepared by lawyers signed by the vendor and purchase must include a copy of the current and valid schedule of tenancy.
What did I say that says no tenancy link is in the contract of sale? All particulars of the sale must be disclosed or the agent is crap and didn't obtain the tenancy schedule for the sect 32
Also unless the property is sold with vacant possession to which the current owner issued a NTV which expires prior to the settlement date or the current tenants have given notice implying there would be no tenancy in place upon transfer of ownership there has to be a schedule of tenancy in the section 32s. When a tenancy is in place and the property sold subject to tenancy the landlord obligations and tenancy laws are valid upon settlement and thereafter.
I'm not a lawyer. I'm an ex property manager.
What I hear thatbum saying is that just indicating that there's a tenant in place is suggestive that the intention is that the purchaser will acquire the landlord's rights with regards to the lease agreement, but in order for the purchaser to legally rely on those rights, there would normally need to be an explicit clause transferring those rights to the purchaser.
It may be that most tenants aren't aware of this "loophole" (if it exists) and the purchaser is likely to get away with attempting to enforce the lease. I think thatbum's point is that they only get away with it because nobody has questioned it.
I'm a lawyer. I'll put the problem simply:
1. As the new owner, you don't have a contract with the tenant.
2. The rights under the existing lease don't "run with the land".
Now where do your legal rights to force the current tenant to "fix" the place come from?
I understand what you are saying however when a property is purchased with a current residential tenancy in place be it periodic or fixed term, the terms of that lease are ongoing until it ends as per the schedule, mutual agreement or by way of giving notice as outlined in the residential tenancy act.
If a property is sold with out vacant possession and subject to a tenancy, the tenant does hold a legal right by way of contractual agreement that is the lease.
Even though the tenancy was with the prior owner, the lease remains valid unless it ends in one of the previously mentioned options. The new owner purchases the property with the tenancy as outlined in the section 32. Therefore by purchasing the property they aquire the tenancy rights.
And with the condition of the property the tenant must return it to the same condition as at commencement aside from 'fair wear and tear'. Now as both a landlord and ex pm, interpretations of this term vary greatly.
When vcat detemines this they of course look at the type of damage in question vs the tenants intention or neglect and the depreciation or lifespan generally this is 7 years in a rental.
This also depends on the member you get at vcat and the thoroughness and experience of your property manager also unfortunately. My belief is if a tenant damages the property due to neglect or misuse then they fix it regardless of how long they have been there. But if they can prove the damage occurred because the owner didn't upkeep or maintain as required then their responsibility is almost zilch. As a purchaser if the damage is there upon settlement it's usually your issue to rectify. I've had some clients stipulate repairs and conditions of purchase prior to signing a contract of sale on a tenanted property.
There may be something in the sale of land act that may clarify a purchase subject to tenancy and the assignment of tenancy for the purchase. I can investigate further but from the property management perspective and residential tenancy act what I have explained is how it works
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I'm not sure you do understand exactly. You as the new owner are not a party to the old lease. The terms can be whatever they want to be, and go on for as long as it wants to be - its not your lease and so means nothing to you.
This is what I'm saying a new prospective owner should be doing. Because I don't think there is legal recourse to get the tenants to fix it after settlement.
Even if there is some tiny legal thing I'm missing in Victoria and I'm wrong, then you will have many difficulties in practically proving your case as the new owner.
I'm sure this doesn't sit well with many landlords here because its not a favourable legal opinion - but ignore it at your own peril.
Yes landlords and pms interpretations tend to vary greatly. The Tribunal member and solicitor interpretation (aka the legal one) is quite simple and consistent though.
Did the tenant negligently or intentionally damage the property?
If not, then 99.99% of the time, the tenant is not liable and its "fair wear and tear". Simple as that.
So guys if I'm reading this correctly, if buying an already tenanted property you'd need to do these two things to cover yourself for this type of situation.
1) New condition report on day you take possession
2) New lease with tenants on day of possession.
All my properties have been vacant possession so I've never come across this, I'd be interested to know if owners have done this or just kept using the existing lease and condition report?
1) New condition report on day you take possession
2) New lease with tenants on day of possession.
All my properties have been vacant possession so I've never come across this, I'd be interested to know if owners have done this or just kept using the existing lease and condition report?
