Where do we stand?

[phm]

We have signed a contract of a property, with settlement being 28th March. There are tenants in there at the moment and according to the contract, they are on a "fixed term - three months" which started on 12th January. If they move out before the three months is up, which the agent has said they will, where do we stand?

I'm not really concerned if they do, but would like to know what are our rights and obligations?

As we don't technically "own" the property yet, we really don't have the right to see the lease, I don't imagine, but relying on the agent's version of events is not comforting enough for me.

I'd just like to know where we stand, when I have to talk to the agent about this, next time.

Thanks

 

[asy]

Originally posted by phm
We have signed a contract of a property, with settlement being 28th March. There are tenants in there at the moment and according to the contract, they are on a "fixed term - three months" which started on 12th January. If they move out before the three months is up, which the agent has said they will, where do we stand?

You have the same rights and obligations as the current owners, as at the date you settle.
You must honour any leases, do any things required of you by legislation (eg: repairs...) and you collect the "rents and profits" of the property.

As we don't technically "own" the property yet, we really don't have the right to see the lease, I don't imagine, but relying on the agent's version of events is not comforting enough for me.

You absolutely have the right to see the lease, once your contract is unconditional. Prior to this you have the right to know all the details of the lease. The amount, the start and finish dates and any special clauses.

You are within your rights to ask to see it.

By the way, don't deal with the sales agent on this one, deal with the property manager. If the property manager has not been introduced to you yet, I wouldn't be happy, unless you have either signed the contracts remotely or after hours. We have a policy in our office, that if an investor is purchasing a property they are introduced to a property manager as soon as possible, so that if they have any queries about renting out the property they can access advice immediately.

hope this helps,

asy

 

[phm]

Hi Asy

Thank you for your reply. Our contract becomes unconditional shortly so I will ask for a copy of the lease then.

The property is out of my town but I will be going back up there for the bldg insp this week and will talk to the PM then.

So that means that, if the tenants leave early they still have to pay us rent, (dependant upon the wording of the lease) until the lease expires?

Although, in saying that, I don't think I'd worry about it, if we can get another tenant fairly straight away. Can you start a new lease with another tenant before the old one has expired?

But it is good to know where you stand. Especially when you have one of "those" agents.

Thanks for your help.

 

[asy]

Originally posted by phm
If the tenants leave early they still have to pay us rent, (dependant upon the wording of the lease) until the lease expires?

Yes.

If the tenant leaves they are responsible for the rent on the property until either their lease expires, or you find a new tenant.

In many cases they will also be liable for a penalty, in our case we charge them one weeks rent, so that we don't charge the landlord a letting fee on the new tenant.

hope this helps,

asy

 

[phm]

Hi Asy

Thank you for your help. I'll get that info when I'm up there this week.

Greatly appreciated.