Telling the tenant you're selling the place

Would anyone be able to help me with following situation: I am selling a unit, which is currently tenanted.

In fact, the IP is let as a fully furnished shared accommodation and has 2 tenancies. One is due to start in 2 days (the RTA is signed, the bond + 2w rent is paid). The other one is in the middle of a fixed term lease.

I manage the IP myself dealing with the tenants directly.

Originally I was planning to start selling in 2 weeks, when the new tenants move in, but the selling agent is pushing to start this weekend because he has a prospective buyer who goes away. What would be the best way to handle the situation?

1. I need to write a nice letter to the existing tenant explaining what's happening - I don't what to upset him too much. Anybody has a template?

2. I need to call the new tenants and tell them.

I have some thoughts, but would like to induce a discussion of the situation in hope to pick up some new ideas.

Thanks and regards,
Lotana
 
Lotana,

Don't know about NSW, But in Qld, You must issue the tenants with a notice of intention to sell. Basically this is a form advising them that you wish to sell your property.

Then you must give them a minimum of 24hrs notice if you wish to take someone through for an inspection. May be worth contacting the appropriate authority for advice.

Cheers
BUNDY;)
 
In NSW you need to honour any lease - If there is stiull a lease in place the purchaser needs to maintain it. You can ask the tenants to leave and even offer to pay costs etc but if they want to stay to the end of the lease they can.

You need to give them sufficient notice for inspections. Obviously if they cooperate and tidy up then your life is easier - why not reduce the rent for the sales period if they agree to short notice inspections and keep the place neat?

Just some ideas.

Good luck,
 
The idea is to sell it to an investor, that's why I made sure it is tenanted with a good return. Some of the questions I've got are:

1. Is it ok to start selling before one of the leases begins (although it is signed)?

2. What should I say in a letter to the existing tenant to win their support for the campaign?

Cheers,
Lotana
 
Start with telling them you'll only sell it to an investor who will honour their lease........ (if that's the truth)

Good suggestion to lower rent in return for quick , neat access during campaign.
 
Maybe invite the tenant to buy. Even if they're not in a position to purchase, they'll appreciate the offer.

If you do sell to an owner occupier, and want the tenants out, the WRONG way to do it is how some agents do it and send a notice to appear in the tenancy tribunal/court with the initial letter.

This gets people's backs up, raises unnecessary alarm and can be frightening to those unsure of their rights.

It is also desirable to combine inspections as much as possible. Eg When I get a quantity surveyor, I will time it with a routine inspection to ensure that there are no more inspections than necessary.

Peter
 
Simon,

I don't think it will be an effective method for selling this one. Apart from saving a few grand on agent's commission. There is nothing dodgy about the property, but I just don't feel like been grilled.

Cheers,
Lotana
 
If the tenants are good tenants let them know. It can be stressful, but if they are good tenants they will be of great assistance to help sell the place. (If not, fear of a bad reference or of TICA is usually enough.)

My wife and I have had to go through this process twice in the space of 15 months. It sucks, but we cleaned the place until it shone and when we learnt of the sale to owner occupiers we moved out as quickly as possible. (One case we had 30 days, another we had 60, in both cases the new owners did want to move in quickly, and in both cases we were out of there in two weeks.)

The process for us usually goes like this.

Recieve notice of sale. Quickly tidy up flat for initial inspection. If more time is granted clean it until it shines.

At this point, we no longer think of ourselves as tenants. We are live in caretakers (who have to pay for the priviledge. ):mad:

Inspections begin. Wife is not present (it stresses her too much.) Answer all questions asked by investors (if I don't know the answer or if the answer might paint the place in a bad light, I tell them its better to ask the agent.) If investors are hostile or rude (like the one whol asked me "so when I buy this place, when can you get your **** out") refer all following questions to the agent. In between inspections, clean, tidy away small stealable objects and start packing in anticipation. (Only if you have a garage, boxes look untidy.) I wouldn't want to subject the tenant to too many inspections, one place we had inspections three times a week plus Saturday morning till noon with up to half a dozen people going through the place.

If the worst happens, and it sells to an owner occupier, the tenant should try to find out when settlement is and if the owner wants to move in straight away.

At settlement, the tenant recieves an eviction notice (this is scary to good tenants the first time, and annoying as well as they have to declare it when renting a new place.) At this point we see ourselves as paying guests who are only being tolerated. We pack, try to find a new unit ASAP and move. After moving we spend at the very least, two days cleaning the flat from top to bottom. The last unit we were in only just over a year and we left it in better condition than when we moved in. (Discovering 20 years worth of grease on top of the kitchen cupboards was distressing, cleaning thought was rewarding, despite the fact that the new owners would probably never look up there.)

Generally, the things that will stress tenants is how long they've lived there and the time of the year. (The first time we had to move was just before christmas. Not a sterling time to look for rentals.)
 
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