Previous owner to rent back for 2 weeks

[Luc]

From: Lucinda Hudson


Hi

I will be settling on an IP next week. The current owner would like to rent it back for 2 weeks (which is ok by me) to coincide with the settlement of her new property. What can I do to ensure that she leaves when she says she will as I need the property by a certain date. The selling agent does not seem keen to be involved.

Lucinda

 

[Anonymous]

Reply: 1
From: Anonymous


why not have the rent paid in advance by way of set off against the purchase money on settlement as an adjustment just like apportioning rates etc?

Also, have them sign a lease for the 2 week period and perhaps put in a clause that the lease will revert to a periodic tenancy thereafter (which is probably what would happen anyway at law).

also take a 4 week bond from them (again set it off against the settlment monies) presumably they haven't got lots of cash lying around to pay you in clear funds...

you will have to lodge the bond with the relevant authority...

Whilst there may be some legislation in your state that has something to say about minimum lease periods etc - this way you will have them on the hook for a lease for the period and can access their bond if they won't move out for rent arrears on the basis you have reverted to a periodic tenancy.

The above might be effective, it might not, but look at it this way:

1) you have their money
2) you can access all the tribunals etc and get the bond money if they try to stiff you
3) maybe they'll stay on longer and you have a document you can waive in front of them saying what rent they have to pay
4) people tend to think that once the paperwork is signed they have to abide by it so even if this doesn't work you can probably bluff them

None of the above is advice. Get some.

 

[Glenn]

Reply: 2
From: Glenn Mott


In this situation, I am sure that for an appropriate fee, a property manager could draw up a lease, collect and register a bond, pay the stamp duty, collect the 2 weeks rent in advance, prepare a property condition report and then upon the vendor/tenant vacating, inspect the property, prepare another property condition report, dispose of the bond and ensure that the tenant does in fact move out on the agreed date. If the tenant decided to destroy the house or not move out, you need to then go to the tenancy tribunal and put you case forward in the time frames dictated by the courts...

Or, you could amend the terms of the contract of sale to delay settlement for the 2 weeks and then get vacant possession for a reduction in the sale price of say, $1000. This way, the owner is more inclined to keep the property in good condition as your approval is still required for them to get their money and you pay stamp duty on a smaller sale price.

Glenn

 

[stirling]

Reply: 2.1
From: Stirling Reid


If you are going to take out landlord insurance in the future, you may want to make sure it is in place from settlement, to cover the initial tenancy.

Stirling

 

[Simon]

Reply: 2.1.1
From: Simon .


I had the opposite problem.

I had the vendor ask to lease back for two weeks after her settlement, so they could settle their place. It was great for us as it got us past a difficult exam period into the holidays.

We gave notice for our current lease.

Now the week before settlement she changed her mind. We have just lost $500 in rent as we were good enough to help her out.

If you do it get them to pay the rent immediately...don't do it on a handshake like I did.

Simon

 

[WebBoard]

Reply: 3
From: Dean Carver


Why don't you extend the completion date to incorporate the 2 weeks. By extending the completion date you then can ensure that you receive good vacant possession and that you can make sure that the property is fully empty and satisfactory to you prior to completion. A final inspection will ensure this. By doing it this way you do not have to worry about the tenant never leaving or leaving the property in a bad state.

Good luck
Dean

 

[WebBoard]

Reply: 3.1
From: Scott Elsom


I like Dean's idea best....much less messy.

I noticed in the Property Owners Association Newsletter, which I received today, a story about someone's experience doing this.

The Vendor's agent completed an RTA Tenancy Agreement and lodged a bond with the RTA. The tenants failed to pay rent and moved out without returning keys. The Vendor/Lessor claimed part of the bond to cover rent and the cost of the keys/locks. The tenants disputed the lessor's bond claim and went to the SCT.

The magistrate ruled that the Tenancy Agreement was a condition of the Contract of Sale and therefore not covered by the Residential Tenancies Act. The court ordered the bond to the returned to the tenants, as it should not have been lodged with the RTA in the first place.

The POAQ's advice....get good legal advice before doing anything. As always...don't rely solely on any information that you receive on Forums like this.

Hope this helps

Scott