WA purchase - what to do when contract condition not met?

[onetwothreefour]

Hi,

We have our financed approved to purchase an IP in WA last week ($530K).
One of the condition in the contract is to have a lease agreement for 12 months in place before settlement.

Now, the agent just informed me that there is a tenant interested to sign a lease (a building contractor), but only wanting to sign for 6 months. And the agent suggested to accept their offer as there is a chance for them to extend their lease.

The agent also blamed our extended period of 3 weeks to get finance approve (caused by the valuer), because the wet season is getting closer.

What should we do? Should we accept the 6mo lease? Will the agent get a new lease contract fee if the tenant extend their lease?

Is it possible if the tenant sign contract for 12 months (to get the sale through) then go MIA? Who will be responsible to cover the remainder of the lease?



The property is in regional WA.

 

[thatbum]

One of the condition in the contract is to have a lease agreement for 12 months in place before settlement..

Hang on, one of the conditions of sale is that the seller had to find and lock in a 12 month lease before settlement???

 

[HotRod]

Sounds like it's in NW of WA.

The 6 months will take you into the start of the dry season next year and make it easier to rent if the tenant walks.

Vacancies in places like Port/South Hedland, Newman, Karratha etc are less than 1%, so vacancy is not an issue.

If you really want the property, take the 6 months.

You really should not have an issue with vacancies in the NW, except for some of the dodgy out of the way places. The main centres should have no issues as rentals are at a premium.

 

[onetwothreefour]

Sounds like it's in NW of WA.

Thanks HR.
It is in Kimberley.

 

[HotRod]

Thanks HR.
It is in Kimberley.

Broome, Derby or Kunnunnura?

 

[redwing]

Hi,

We have our financed approved to purchase an IP in WA last week ($530K).
One of the condition in the contract is to have a lease agreement for 12 months in place before settlement.

It was vacant prior and you requested a tenant in place on a 12 month lease?

Now, the agent just informed me that there is a tenant interested to sign a lease (a building contractor), but only wanting to sign for 6 months. And the agent suggested to accept their offer as there is a chance for them to extend their lease.

This is a residential IP? Whats the vacancy rate like in the area (and what is it historically for the coming months)

The agent also blamed our extended period of 3 weeks to get finance approve (caused by the valuer), because the wet season is getting closer.

3 weeks total, or an additional 3 weeks?

Cyclone season starts in November

What should we do? Should we accept the 6mo lease? Will the agent get a new lease contract fee if the tenant extend their lease?

Who knows, if you're comfortable with your DD, go for it

Is it possible if the tenant sign contract for 12 months (to get the sale through) then go MIA? Who will be responsible to cover the remainder of the lease?

The tenant...if they sign for 12

The property is in regional WA.

Hi 1234

Added in some queries above