private tenant, long settlement

[want2bewealthy]

So I've bought an interstate property and haven't been in myself, just photos.

The current owner has tenants in without a lease as they are apparently friends.

The REA called yesterday to delay settlement for 60 days, which is fine for me because I've secured the purchase price and don't have to start paying anything for that period.

The only thing I'm slightly worried about is this
what if the current tenants don't leave the property in its current good state?

I did add a clause to the contract stating that my PM has rights to do an outgoing inspection 2 weeks prior to settlement but they don't know what condition its in currently so don't see how this would work?

Would you suggest I call them and have one done now, and then a final inspection at a later date?

Also, do I need to get insurance now, or at settlement? I'm talking more building insurance cover but LL insurance too?

Cheers guys.

 

[Rockstar]

Would you suggest I call them and have one done now, and then a final inspection at a later date?
Cheers guys.

Yes I would definitely. Good luck with the outcome.

 

[Rob Williams]

You really ought to get the insurance sorted now, too.
Congrats!

 

[steveadl]

For when you take the place over and have new tenants you'll need LL insurance, however getting it now won't cover you for whatever these current tenants may or may not do as there is no lease agreement.

 

[yadreamin]

I would be getting an inspection done and some photos taken now.
Its always better to be cautious. it may also save you some problems at settlement if the property is not in the same condition as when you agreed to purchase it.
Well done on this new ip.
cheers
yadreamin

 

[want2bewealthy]

Well I've just secured Landlord insurance through the only guys I know of down there RACV, Very reasonable rate, it costs me $550 per annum which includes 300k of building insurance,

Also getting my PM to take some snaps.

 

[Ridin-High]

Well I've just secured Landlord insurance through the only guys I know of down there RACV, Very reasonable rate, it costs me $550 per annum which includes 300k of building insurance,

Also getting my PM to take some snaps.

Lucky you secured the insurance policy before they all got sold out.

From what you said "without a lease" my understanding is that you must have a lease in place to make a claim against a tenant.

Regs,

RH

 

[josko]

Good on you W2bW,

I was in the same situation 12 months ago. I wrote clauses into the contract to the effect that the owners agree to have the property cleaned to professional standard and that the property was to be vacant at least one week before settlement. (Provided the current tenants did not want to sign a new lease.

Get snaps of outside gardens and backyard.

regards Jo

 

[Puff-n-stuff]

Hiya Want2be,

Well done on the purchase.
The vendor sells with 'friends' in place. Hopefully all is above-board and that he's not taking his friends interests into account more so than yours.

Get some written statement from the vendor or current PM stating what the current rental is, bond etc. You need some proof in case you need to claim on your LL insurance. Get as many tenant details as you can also.

Have a look at your contract of sale - and make sure it states 'to be sold with vacant possession'. Then it's the vendors job to get rid of the tenants, not yours. The last thing you want is squatters or tenants hard to remove. Under a formal lease, you have the State residential tenancies law backing you up. Check with the agent perhaps to reiterate that the sale ain't going through unless they're out.

State of the property - the property needs to be in a similar state to when you first inspected. You get a final bite of the cherry before settlement. Your right to inspect the property 7 days (?) before settlement. Have a look-see. Any problems, get them noted down and again, tell the agent or your conveyancer / solicitor. Again, photo's would be a great thing to have to prove the condition.

Insurance - get your own building insurance from day one, whether or not the current vendor has his own insurance. You'd hate for something to happen to the property and you have any headaches'with their insurers.

Hope all pans out.
Enjoy Want2be!

 

[redwing]

With the delayed Settlement are you still pre-qualified for finance?