The property I have purchased has tenants currently living there. The settlement date is about 10 days ahead of the end date of their contract. Can I move in on the settlement date or do I have to wait until the tenant's contract ends? The real estate told me that I cannot kick the tenant out before their contract ends even though my settlement date is ahead of their contract expiry date. Is that right?
Question about settlement
- Thread starter aitsmoi
- Start date
Heya
I'm a total newb to this, but as far as I know, you have to wait till their contract (lease?) ends before you can move into the property, or take "vacant possession".
You purchased the property knowing there were tenants in residence, so you have to stick by the laws that protect the tenants from suddenly being out of a home, you know? lol
Your real estate agent (if they're the ones in charge of the rental of the property and not just the sale to you, of course) should confirm to the tenants in writing that their lease will not be renewed and they must be out following the end of their current lease. It doesn't matter whether that date is 10 days after your settlement date, or 3 months. You have to wait.
You're lucky it's only a 10 day "gap". If it was 6 months or so, you'd have to deal with different tax issues cause you'd be the landlord, receiving rent, you may have to take out landlord's insurance, etc...
I'm a total newb to this, but as far as I know, you have to wait till their contract (lease?) ends before you can move into the property, or take "vacant possession".
You purchased the property knowing there were tenants in residence, so you have to stick by the laws that protect the tenants from suddenly being out of a home, you know? lol
Your real estate agent (if they're the ones in charge of the rental of the property and not just the sale to you, of course) should confirm to the tenants in writing that their lease will not be renewed and they must be out following the end of their current lease. It doesn't matter whether that date is 10 days after your settlement date, or 3 months. You have to wait.
You're lucky it's only a 10 day "gap". If it was 6 months or so, you'd have to deal with different tax issues cause you'd be the landlord, receiving rent, you may have to take out landlord's insurance, etc...
So for that 10-day gap, do I need to do public liability insurance to cover myself from unforseen damages or injuries to the tenants? How does this work? Or is it possible to delay the settlement date so that it falls on or after the tenant's lease runs out?
I am still thinking whether to keep the tenant there for few more months. Any advice?
I am still thinking whether to keep the tenant there for few more months. Any advice?
Is this for a PPOR? If so, it would be far preferable to have the contract completed after the tenancy expires and stipulate vacant possession. That way the removal of the tenant becomes the vendor's responsibility. It may be too late for this if contracts exchanged.
And despite the lease ending, you still have to give the tenant adquate notice that renewal won't be offered. The relevant state leglislation will set out the correct notice period.
If the property is to be an IP, it may be to your advantage to negotiate with the existing tenant. Adequate notice of any rent increase or change in lease conditions will still have to be given.
Marg
And despite the lease ending, you still have to give the tenant adquate notice that renewal won't be offered. The relevant state leglislation will set out the correct notice period.
If the property is to be an IP, it may be to your advantage to negotiate with the existing tenant. Adequate notice of any rent increase or change in lease conditions will still have to be given.
Marg
On the front page of your NSW contract it will indicate if the property is to be provided as "vacant possession" or "subject to existing tenancies."
If the tenant is still under a fixed term lease you have honour their lease for the remainder of the term. Welcome to being a landlord.
I would have expected a copy of the lease to also be included in the contract. These things probably should have been checked before you signed but make a call to your solicitor.
Hope it's not a 12 year DHA lease!
If the tenant is still under a fixed term lease you have honour their lease for the remainder of the term. Welcome to being a landlord.
I would have expected a copy of the lease to also be included in the contract. These things probably should have been checked before you signed but make a call to your solicitor.
Hope it's not a 12 year DHA lease!
No.
Not only do you have to wait until the tenant's lease ends you have to give appropriate notice after it does end. Unless the current LL gave notice to the tenant, that when the lease is up they have to move out, then you will have to wait 64 days minimum (60 days notice on an expired continuing lease + 4 days postage) from when YOU give them notice after settlement.
Yes get LL insurance for this period.
What exactly is PPOR? I am a first home buyer. So it's not an investment property. I've paid the 10% and now waiting for the settlement.
I think you need to sit down with your solicitor or whoever you are using to act on your behalf to fully understand what you are buying and what your requirements are.
If possible do it today.
They will need to advise you the conditions of the sale i.e that the premises is sold with a tenant and the conditions of that tenancy.
You need to advise them of what you want to do with property i.e. move in as an ower occupant.
This way you will be informed exactly of what you can and cannot do and any necessary timings.
Its great that you posted and that they others have answered, but it should be down to your solicitor to steer you in the right direction as that is why you are paying for.
Congratulations on the purchase and good luck with the settlement,
If possible do it today.
They will need to advise you the conditions of the sale i.e that the premises is sold with a tenant and the conditions of that tenancy.
You need to advise them of what you want to do with property i.e. move in as an ower occupant.
This way you will be informed exactly of what you can and cannot do and any necessary timings.
Its great that you posted and that they others have answered, but it should be down to your solicitor to steer you in the right direction as that is why you are paying for.
Congratulations on the purchase and good luck with the settlement,
I think you need to sit down with your solicitor or whoever you are using to act on your behalf to fully understand what you are buying and what your requirements are.
If possible do it today.
They will need to advise you the conditions of the sale i.e that the premises is sold with a tenant and the conditions of that tenancy.
You need to advise them of what you want to do with property i.e. move in as an ower occupant.
This way you will be informed exactly of what you can and cannot do and any necessary timings.
Its great that you posted and that they others have answered, but it should be down to your solicitor to steer you in the right direction as that is why you are paying for.
Congratulations on the purchase and good luck with the settlement,
This is what we lawyers/conveyancers are paid for, ask questions and make them explain it to you. If you are hesitant to ask your lawyer/conveyancer these questions then you have the wrong lawyer/conveyancer as my clients never feel uncomfortable asking me questions and I encourage this. It makes the whole process that much easier for everyone and it makes very happy informed clients!
Danger! Danger! Danger!
Do not, repeat NOT, settle with the tenants in place. You'll need landlords insurance, and there's a risk that the tenants won't move out. If you're applying for FHOG or getting stamp duty concessions as a first home buyer, you need to also check whether the presence of a tenant at settlement compromises your eligibility for either of these.
Ignore Rodney's comment; I don't know what planet he's on.
Do not, repeat NOT, settle with the tenants in place. You'll need landlords insurance, and there's a risk that the tenants won't move out. If you're applying for FHOG or getting stamp duty concessions as a first home buyer, you need to also check whether the presence of a tenant at settlement compromises your eligibility for either of these.
Ignore Rodney's comment; I don't know what planet he's on.
I'm selling a house too, dangerously close to the end of the lease. It is annoying, mainly because the buyer is awol and has been stringing me along for months and I have my own deadlines now.
How long away is this settlement anyway? Noone in their right mind who wants a house to move into would settle a mere 10 days before the lease ends. It would be a paperwork nightmare. Go back and renegotiate an extra 10 days.
How long away is this settlement anyway? Noone in their right mind who wants a house to move into would settle a mere 10 days before the lease ends. It would be a paperwork nightmare. Go back and renegotiate an extra 10 days.
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