What would you do with this tenant?

[yadreamin]

Good news Sailor, lets hope the rest of the process goes smoothly.
However can anyone tell me when there is property damage and the withheld bond money does not fully cover the repairs at what point does landlord insurance kick in, or should the landlord insurance company be the first call?
cheers yadreamin

 

[sailor]

yes good outcome Sailor!

If the lease had been properly drawn up, on what grounds can they break the lease?
Vendor, purchaser or tenant?
If the tenant dug their heals in, the agent could have a real problem as they have acted without instruction.
The vendor says she gave the PM a verbal instruction not to renew the lease, but to make it periodical.
The PM does have a real problem now...has to tell the tenant they don't have a lease with guaranteed pittance-rent for another 12 months!
The PM could potentially have to pay the tenant to leave or compensate the other parties.
Now there's an interesting thought! Do you have a reference for this one please?

All good points...thanks.

 

[Ausprop]

If the lease had been properly drawn up, on what grounds can they break the lease?
Vendor, purchaser or tenant?
The Vendor, as they are the ones that want to provide the property to you without a sitting tenant

If the tenant dug their heals in, the agent could have a real problem as they have acted without instruction.
The vendor says she gave the PM a verbal instruction not to renew the lease, but to make it periodical.
Yep...PM has acted without authority

The PM does have a real problem now...has to tell the tenant they don't have a lease with guaranteed pittance-rent for another 12 months!
The PM could potentially have to pay the tenant to leave or compensate the other parties.
Now there's an interesting thought! Do you have a reference for this one please?
No real reference as such... I am actually unsure as to the situation on reflection. An agent has been appointed to lease the place (from way back when) but that agency was verbally withdrawn. I guess on that basis, the PM couldn't validly set up a new lease. Thus the agency may need to comensate the tenant for their stuff up. I am no lawyer tho; this would seem to hinge upon whether the agent has a valid auhtority to act. If yes, then Vendir has a problem, if no, then tenant and PM have a problem.

 

[sailor]

Thanks for that Ausprop. I will certainly follow-up and see that tis all sorted before settlement.

 

[gerd.]

Hi sailor

I am under the opinion that in your state only two weeks notice is needed to move on the tenant.

Gerd

 

[sailor]

Hi sailor

I am under the opinion that in your state only two weeks notice is needed to move on the tenant.

Gerd

I wish! Try 2 months!

 

[sunshine]

I wish! Try 2 months!

I'd check that out Sailor.

My understanding is the RTA Notice to leave (form 12) can be issued for 30 days notice -upon sale of the property and when vacant possession is required.


Good luck

sunshine

 

[sailor]

Thanks Sunshine...I checked it out on the RTA site!

 

[sunshine]

Hi Sailor

Set me straight please, which category does this fit into

4 weeks for a sale contract signed when the tenants are on a periodic agreement;
2 month's 'without grounds' (no reason) under a periodic agreement;

or do I have no clue what is being talked about at all

Still trying to learn the rules up here in QLD, sometimes I feel like I am in a different country - a very very nice one though

sunshine

 

[sailor]

Hi Sunshine, my case was a little more complex:

Hi Sailor

Set me straight please, which category does this fit into

4 weeks for a sale contract signed when the tenants are on a periodic agreement;

Yes, this is according to the RTA. But in my case the lease expired in the middle of the contract period, and the PM (without the vendor's consent) signed the tenant up for a 12-month lease @ $165 pw, when median rentals are $220 pw. Vendor had also given PM verbal notice of Contract of Sale, plus instruction to put tenant on a periodic agreement.

Vendor and I had agreed to a periodic agreement. Now the PM is trying to locate the tenant (who went away on hols in the middle of all of this), and notify them of the invalidity of their signed lease.

2 month's 'without grounds' (no reason) under a periodic agreement;

Yes, this is in accordance with the RTA rules.

or do I have no clue what is being talked about at all

Nah...you are doing fine. Tis complex.

Still trying to learn the rules up here in QLD, sometimes I feel like I am in a different country - a very very nice one though

sunshine

I appreciate the discussion and clarification...keep up the good work.

 

[sailor]

I phoned the PM again today, to see if they had contacted the tenant to advise him that his lease was invalid. PM stated the new lease remains intact. I advised her this was illegal, due to the Contract of Sale. She then denied ever having received a verbal instruction from the owner to put the tenant on a periodic agreement. (So in effect she is now contradicting herself to me.)

So I checked out the Qld Residential Tenancies Act (1994):

"S 20A Contracts of Sale and Mortgages
To remove any doubt it is declared, that this Act does not apply to an agreement for a tenancy if the tenancy is created or arises ---
(a) between the parties to a contract of sale of residential premises under a term of the contract;"
http://www.legislation.qld.gov.au/LEGISLTN/CURRENT/R/ResidTenA94.pdf

This was the only reference I could find in the whole Act that relates to a Contract of Sale.

So now I need a hand to understand what this piece of legislation means please forumites:
1. Does it mean that the Act doesn't apply to me because the tenant is not a party to the contract of sale? or
2. Does it mean that the Act doesn't apply because the Contract of Sale states the end of the lease date which occurred in the middle of the contract period? or
3. Something else?

I'm confused.

 

[simonjulie]

Hi Sailor
Have you discussed the situation with the tenant personally?
Cheers
Simon

 

[sailor]

Hi Sailor
Have you discussed the situation with the tenant personally?
Cheers
Simon

No I haven't:
a. Don't really want him to stay. (And I should have asked for vacant possession.) And I don't want motor bikes in the bedroom.
b. Don't want him to know that I'm to be the new owner...well my trust is legally the new owner.

 

[Macca]

Hi Sailor,

In NSW, if a property is subject to a lease then it must be shown on the sale contract.

If this applied in QLD and no lease was shown on the contract you may be able to withdraw from the purchase.

Have you had advice from your solicitor ?

Another thought is to "buy" the tenant out of the lease, give him $5k to go away

 

[simonjulie]

I would try to come to a compromise.
1. I would look for the least line of resistance.
2. I would look at the dollars. How much will it cost me to fight this with the agent? How much would it cost me to let the tenant stay?How much would the tenant take to leave?
Bottom line is it does not matter who is right and who is wrong but more that a happy result all round is accomplished.
There are so many shades of grey in between black and white.
3. How much stress is this deal causing. Is it generally worth the worry?
I know you have probably considered all the above but I just had to voice it.
I know you will do the best for you.
Cheers
Simon

 

[investor]

I would call my solicitor and tell them to get me out of the contract on the grounds that I wanted a periodic lease (which is in the contract) and thus the contract is void.

See how the vendor and agent feel about that.

Regards
Investor

 

[GoAnna!]

Hi Sailor,

I would have thought that given the contract clearly does not allow for another 12 month fixed lease to be put in place that it is purely a matter for the vendor to sort out. Surely you do not have to settle unless and until the tenant is on a month by month lease. How the vendor, PM and tenant sort that out is surely their issue and not yiurs?. Surely if any money was needed to encourage the tenant to leave it would be paid for by either the vendor or the PM.

Perhaps you could offer to delay the settlement until they sort it out between them all

 

[sailor]

Hi Sailor,

In NSW, if a property is subject to a lease then it must be shown on the sale contract.

If this applied in QLD and no lease was shown on the contract you may be able to withdraw from the purchase.

Have you had advice from your solicitor ?

Another thought is to "buy" the tenant out of the lease, give him $5k to go away

The same applies in Qld...property subject to a lease must be shown on the contract of sale. The Vendor's solicitor drew up the contract, I included the lease details when I received it, in the presence of my solicitor. Signed contract came back from vendor. My solicitor said the PM cannot issued a new lease in the middle of a contract period, especially as I had written in the lease expiry date.
I'm not prepared to "buy" my way out of this lease (yet), as I am purchasing with the Vendor's agreement that on settlement the lease will be periodical.

I would try to come to a compromise.
1. I would look for the least line of resistance.
2. I would look at the dollars. How much will it cost me to fight this with the agent? How much would it cost me to let the tenant stay?How much would the tenant take to leave?
Bottom line is it does not matter who is right and who is wrong but more that a happy result all round is accomplished.
There are so many shades of grey in between black and white.
3. How much stress is this deal causing. Is it generally worth the worry?
I know you have probably considered all the above but I just had to voice it.
I know you will do the best for you.
Cheers
Simon

I want to take a firm stand, up to the point when my SANF comes into play, then I will consider the financial costs involved of taking legal action.
It might simply take the cost of a letter from my lawyer to the vendor's lawyer. Or failing that, it might take a motza to pay the tenant to leave. Or failing that, it would cost close to $3K plus any damages/neglect the tenant does during the 12-month lease period. (There is gross evidence of neglect to date, and I have yet to assess any damages caused by the motor cycles on the marble floors, etc.)

I would call my solicitor and tell them to get me out of the contract on the grounds that I wanted a periodic lease (which is in the contract) and thus the contract is void.

See how the vendor and agent feel about that.

Regards
Investor

I've spoken with the conveyancing clerk, had advice from one property lawyer, and having a conversation with the property-lawyer-guru (all from my legal firm) today.

Hi Sailor,

I would have thought that given the contract clearly does not allow for another 12 month fixed lease to be put in place that it is purely a matter for the vendor to sort out. Surely you do not have to settle unless and until the tenant is on a month by month lease. How the vendor, PM and tenant sort that out is surely their issue and not yiurs?. Surely if any money was needed to encourage the tenant to leave it would be paid for by either the vendor or the PM.

Perhaps you could offer to delay the settlement until they sort it out between them all

Yes, I agree GoAnna...thankyou. At this stage tis not my problem to sort out, and I need to put action in motion for those responsible to get it sorted. I'll have a chat with my legal-guru this morning. We don't settle until 9th May, so plenty of time for them all to get their act(s) together. I would like something in writing from the vendor's lawyers that their is a periodical arrangement in place.

 

[sailor]

Another few questions?

I do appreciate the diversity of opinions in this thread...it certainly helps me to get perspective on this issue. So my thanks to you all.

I have another couple of questions:

1. When a property settles, and there is already a PM in place, and I don't want to use them, do I just let them know I'm coming over to collect the keys and a copy of the existing lease and RTA-Qld Bond Lodgement papers?
2. I imagine I would then contact the RTA-Qld and advise them I am the new owner, and to transfer my name to the appropriate documents?
3. Then, if I didn't want to extend the lease, or continue with a periodical agreement, and the tenant moved out, I would be able to use the bond money to fix any damage?

My concern is that the current PM will refund the entire bond to the tenant without doing their due diligence in an inspection. They seem to be a pretty slack mob to me...and I want to avoid any problems.

 

[geoffw]

Another thought is to "buy" the tenant out of the lease, give him $5k to go away

The thought is good, the $$ are too high.

I've heard of two weeks rent being successful in persuading a tenant to leave.