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kam82
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Buying a house with current tenants

Mon Jun 15, 2009 8:48 pm

In NSW if you buy a house with a tenant on a current lease, can you terminate that lease apon purchase, or do you have to honour the remainder of it?
 
Silva85
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Re: Buying a house with current tenants

Mon Jun 15, 2009 9:39 pm

As far as I know you have to honour it. Most people when they sell the house put tenants on a month to month lease.

Check with the estate agent or the Real estate institute or whatever they're called in NSW
 
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Ashie
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Re: Buying a house with current tenants

Tue Jun 16, 2009 9:07 am

I'm fairly certain, depending on the lease, you have to honour it.

If it's a fixed term lease, say until September 2009, then because it's a legal agreement, and you're purchasing the house well aware of that agreement, you have to honour it.

If it's a month-by-month lease, then you can go through the process of giving them their notice and getting them out of the house.

My friend went through this when she bought her first apartment last year, she had to keep her tenants in for about 5months before she could move in.
 
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bonnyh
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Re: Buying a house with current tenants

Tue Jun 16, 2009 9:19 am

Also In vic (so not sure about NSW) you need to give the tentent 90 days notice of any changes that are going to happen in thier lease, Unles they are breaking the agreement or law.
 
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mellyk83
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Re: Buying a house with current tenants

Tue Jun 16, 2009 10:27 am

U can give them 90 days notice if u intend to occupy the residence I think perhaps contact the REIV if u r in VIc, it all depends on the terms of their lease so u may be able to get them out sooner than 90days depending on their lease
 
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Re: Buying a house with current tenants

Tue Jun 16, 2009 2:21 pm

mellyk83 wrote:
U can give them 90 days notice if u intend to occupy the residence I think perhaps contact the REIV if u r in VIc, it all depends on the terms of their lease so u may be able to get them out sooner than 90days depending on their lease


In Vic even if you intend to occupy the property you have to honour the lease. The lease runs with the property, not the landlord, and the rules are set up largely to protect tenants (if they weren't then people could find themselves homeless on the whim of their landlord). Check with your local real estate institute, or Consumer Affairs equivalent. In Victoria even if the tenants are "month-to-month" there are still rules about how much notice you must give (and it's usually longer than a month). You can give notice before the end of the lease, but cannot require the tenants to have moved out before the expiry of the lease. You should investigate the notice required, end date of the lease and consider your settlement period. If the lease expires in 4 months and you negotiate a 120 day settlement, you can ask the current owners to give the tenants notice, which will get the ball rolling sooner and have your tenants out around settlement. You are not entitled to do this yourself until after settlement. However some vendors will resist as once they have given notice the tenants may move out sooner, leaving them without rental income up to settlement.
 
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Re: Buying a house with current tenants

Tue Jun 16, 2009 3:24 pm

mellyk83 wrote:
U can give them 90 days notice if u intend to occupy the residence


I know this to be true. We needed to get our tenants out quickly in order to occupy our first unit years ago and we did them a deal whereby we gave them 2 weeks free rent if they got out within 4 weeks. I think the normal notice period is 90 days however.
 
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kam82
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Re: Buying a house with current tenants

Tue Jun 16, 2009 4:46 pm

The agent says we have to honour the lease however, the vendor is happy to exchange on the property and hold off settlement until the lease is up (Jan 2010). If we decide to settle, we then become the landlords but i'm not sure if I want to do that.
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