Tenant Removed During Contract

[turtle007]

Guys,
New here and just wanted to ask a quick question...we are in the middle of buying an investment property in the same complex..only 3 doors down...our onsite manager has the rights with the current owners to manage their properties. He has removed the current tenant and put them in his own investment in the same complex, therefore leaving the selling property empty. But he will be re-tenanting it with who knows what kind of tenant. We are only a few days from going unconditional , do we as the buyer have any rights in this situation? Do we have any say on the new tenant. NOTE: this onsite manager has no heart....
Thanks

 

[Raddles]

Hi there
you need to go back to look at your contract - what has been disclosed to you by the vendors
If you have restrictions on putting in tenants it will be in the paperwork - if you haven't got a copy - has your solicitor or conveyancer got a copy.
I am assuming you are purchasing a unit - and part of the disclosure requirements are the body corporate details - and the management arrangements. - get a copy.
I note we had a changeover of management rights and the party involved had an obligation to comply with the ASIC disclosure requirements - and to give us a new agreement which would require legal advice to be obtained on.
If your solicitor hasn't yet done one - go and look at the body corporate records - they also have copies of all the management agreements etc
thanks

 

[wylie]

Were these tenants on a lease? If so, then they should be covering any vacancy and reletting fees, unless there are different rules for this type of accommodation (which I have no idea about).

Assuming that he has done a "sneaky" "look after himself at your expense" deal with these tenants, I would be very wary that you will be relying on this same manager to be managing your property, but I assume there is no option?

Of course, maybe if the rules for this are different for "normal" rentals, maybe what he has done is quite okay.

 

[turtle007]

If we continue to purchase the property he will not be managing it, we think he knows this and this is why he is doing what he is....do we have a legal leg to stand on to pull out of the contract as we are not at unconditional yet?

 

[alexlee]

Seems unusual, since if you have an onsite manager you usually get them to manage your property. After all, you're probably paying them anyway.
Alex

 

[Raddles]

Hi there T007
you are really asking questions that require consideration of your contract.

If your contract said that the vendor would sell a property with a tenant in it - perhaps you have grounds to pull out but if the contract just notified you there was an existing tenant, then until settlement the arrangements with the existing vendor will apply. You need to find out what those are!
thanks

 

[wylie]

Do you want to pull out of the contract because the tenant has gone? Will it be difficult to find another tenant at the same price?

Or have you changed your mind about the purchase and are looking for a way out?

 

[turtle007]

No we haven't changed our mind and it would be easy to get a tenant...the two issues are they are going to re-tenanted it before we receive the keys and they don't care the type of tenant that goes in and if they sign a new 12 month lease and it is a no good tenant it could cost us a lot more. And the other issue is if we keep the investment here what is he going to be like as a manager as our neighbor has informed us that he was offered to change to the on site managers investment even though he has nothing to do with the current tenants property. We are not trying to pull out there is a huge waiting list to get into this complex, we are just concerned about the behavior of the on site manager.

 

[poppy]

Any leases affecting the property have to be disclosed in the contract, is that correct? So once the contract is signed, I don't see how the vendors can legally sign up a new tenant on a new lease without your agreement. What if you purchased a property with a tenant in place, with say a couple months left on their lease, intending to move in yourself when the lease it up. Just prior to settlement, vendor signs a new 5 year lease with their son to live in the property for $10 a week rent! Surely that cannot happen.

I would tell my solicitor to tell the vendor they are NOT to sign any new leases without your agreement.

 

[GoAnna!]

Were these tenants on a standard residential lease? If so did the vendors release them from this lease? If not are you due for rent until you relet the apartment?