Property Owner Selling Mid Lease

• 

  ferguscan on 21/02/2014 - 09:50

  +1

  The new buyers will inherit the lease. AFAIK, they can't kick you out.

  • 

    NosDan on 23/02/2014 - 19:00

    might be different in SA but yes the new owners inherit the lease but if the new owners want to live there they can terminate the lease and give you your 28(?) days to find somewhere new and move…

• 

  [Deactivated] on 21/02/2014 - 09:54

  +2

  I know that in Vic, you don't have to give the usual months' notice if the property is being sold, you can just give two weeks' notice to leave.

  The property is much more attractive if there's an existing long-term tenant there. Find out how short the notice you have to give will be in NSW, and then tell them you'll leave if there are too many inspections.

  The new buyers cannot kick you out of the lease.

  As for buying it - I'm not sure what your situation is, but I'd discourage it. Buying your first property is often a big deal and involves a lot of research. Of course, you could have a look over your financials and have a (calm) think about it. If the financials work out, why not? But, many people buy their first home as soon as they can afford to, and it doesn't sound like you've been planning to. Here are some financials to consider:

  • Do you have a 20% deposit ready? If you've got 10%, be prepared to pay LMI
  • Strata fees
  • Cost of building inspector (we pay our guy $290 a pop)
  • Conveyancing (Easily $1000 or so, but might be less)
  • Taxes. There are stamp duty calculators online, but I think you're looking at least 30k or so. (Not sure, because my house purchase was more expensive and there's a drastic jump after 500k I think. Check online)
  • Interest rates. What will your mortgage work out to be? Ideally, you want to pay off your mortgage as soon as possible, so that you don't wind up paying 100k's in interest.
  • 

    theguru1 on 22/02/2014 - 08:10

    Wintergirl, In Victoria, unless the owner is breaching a fundamental condition of the lease, the tenant does not have the right to terminate the lease because the owner is selling the property before the termination date of the lease. In this case 9 months away.

    The tenant can not be kicked out prior to the termination date of the lease and the owner/ agent has rights to show people through, subject to certain conditions, for the purpose of selling the property. At least 24 hours notice is usual. It is also usual for the owner to provide some sort of rent reduction during the inspection period for the inconvenience.

    On the other hand, the owner may mutually agree to let you terminate early, but given that they are in financial troubles they may not want to forgo income.

    • 

      [Deactivated] on 24/02/2014 - 09:02

      Hi guru1 - I researched the OP's situation a few months back when my friends were in a similar position. Maybe I'm phrasing this wrong, but a renter can terminate a lease early, subject to terms and conditions. (http://www.consumer.vic.gov.au/housing-and-accommodation/ren…) These conditions change when the property is being sold during the period of lease.

      I hadn't heard of the reduced rent possibility before, but if the OP could negotiate that, it would be the True Ozbargain Way :)

      • 

        theguru1 on 25/02/2014 - 07:47

        True, you can always break a lease, but it will be at a cost to the OP. The sale of a house would not normally be considered severe hardship either, it is a common occurrance. There can be exceptions, but that doesn;t make it the rule.

        The OP did mention that the agreement had a clause about not selling, I think I would get advise on that to see if that was a no cost out.

        Maybe the OP might want to step back a little and look at the situation a little more calmly. If they really love the place, then look at buying, otherwise let the sale happen, ask for a rent reduction, and spend the next 9 months considering what they might do then.

• 

  pebee47 on 21/02/2014 - 10:21

  +1

  regarding costs of purchase:
  Find a good Home Finance Broker and get him/her to give you a complete rundown on all the costs of a Loan.
  Do the same with a Conveyancer for all those "other" charges (Title transfer/stamp duty etc)
  Also find out when these amounts are payable; even if the loan covers conveyancing, often the stamp duty and lodgement charges are payable before the Lender hands over the money (catch 22 situation if you don't have any money)
  You'd have to convince these ppl that you will be using them when you buy, otherwise what's in it for them?

• 

  pebee47 on 21/02/2014 - 10:24

  +2

  ps; I'm a retired Finance Broker
  + listen to Wintergirl, she's got her smarts. given good advice in the past
  Best of luck in your quest

  • 

    [Deactivated] on 21/02/2014 - 11:43

    +1 for the flattery ;)

    • 

      cureforanitch on 21/02/2014 - 16:56

      +1

      +100 for the great advice. Much appreciated

• 

  RandomNinja on 21/02/2014 - 10:50

  Aside from costs, you may want to consider whether you're happy to live in Rhodes potentially for the length of your home loan?

  I'm in Rhodes as well and love the location, but IMO the influx of residents from all the new apartment complexes are starting to strain infrastructure and services…

• 

  fatboyslim on 21/02/2014 - 16:10

  +1

  Just a word of caution…. Rhodes used to be an area of dump where they dump all the contaminated waste there. prior to it being developed - they needed to be decontaminated/rehabbed. I used to see black/stinky smokes coming out of the area where all the new apartments are at the moment. I actually know friends who live there, didn't know the history and got sick all the time but since they moved out, they were OK again (1st person information, not rumours from some where)

  Unless u like to stay in Rhodes for a very long time, I don't recommend buying there. Supply is plentiful and u can easly move around as there will be plenty available for rents also. Strata also will be expensive and u'll have to pay ur council rates/water as well.

  • 

    Speckled Jim on 22/02/2014 - 09:46

    Mill Park Street? I know some residents there too.
    If you watched Shitsville Express last year, the episode on housing affordability saw them visit that monstrosity.
    They weren't complimentary about it either.

• 

  fatboyslim on 21/02/2014 - 16:12

  is that ur apartment???

  <MOD: link removed>

  from looking at the pics - the pool scares me a bit - it's way too big.. I think strata will be a very big factor to consider and it can go up also in the future.

  • 

    cureforanitch on 21/02/2014 - 16:57

    Youre scaring me!

    • 

      fatboyslim on 21/02/2014 - 18:37

      don't worry, I'm only trying to help. I won't come n knock on ur door. cheers

      • 

        NosDan on 23/02/2014 - 23:56

        seriously dude, why are you taking it to this creepy level? really not cool

        i saw your other comment at teh end of this thread giving out this persons address etc. what the hell is wrong with you?

• 

  r2160 on 22/02/2014 - 08:57

  If you are considering buying the unit, look with your head, not your heart. Dont buy if its just inconvenient for you.
  When considering loan calculations, base your repayments on an interest rate at least 1% greater than it is currently. A lot of people get into trouble looking at the current interest rate, and then when it rises half a percent or one percent, all of a sudden they cannot afford to repay the loan.
  As others have said, look with your head!!

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  cureforanitch on 22/02/2014 - 11:47

  Really appreciate all the advice guys

• 

  WT on 22/02/2014 - 12:49

  you can try low balling but in this market, the estate agent will just advise to take a higher offer. If hes worth a dam he will be able to get a quick sale without being too far off a realistic price

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  mini2 on 23/02/2014 - 11:49

  The numbers look crap:

  $530 rent, after the agents take their cut (assuming they're 7.7%), $489.19 a week and assuming the sale price is $500k flat, 5.08% yield gross. Take your strata, insurance and everything else you'd be barely doing 4%. Whatever fatboyslim says is exactly what I read - Rhodes used to be a dump and of which some are even radioactive…

  http://www.smh.com.au/news/National/Toxic-secrets-of-the-und…

  There's used to be more articles but I'm sure they're being made not to be easily found on Google anymore.

  Oh yeah this fact sheet might help re your current situation:

  http://www.tenants.org.au/factsheet-10-landlord-ends-agreeme…

• 

  HidingTigger on 23/02/2014 - 12:11

  I've had and agent try to evict me mid lease after the property I was renting was sold. They claimed that I had never signed a new lease therefore shifted to periodic. Luckily my partner had made a copy of the lease and had kept the receipt for the additional bond payment needed due to an increase in rent. We still had to file our complaint with the small claims tribunal were judgement was found in our favour. The new owners were quite accommodating (lol) however once the lease had expired the offending agent would not give us a fair reference. I suggest you first speak with the property manager about your concerns and document the conversation. Also make sure you keep all receipts and a copy of the current lease. Unfortunately there are some sharks out there.

• 

  [Deactivated] on 23/02/2014 - 19:30

  How much can I push back if they start holding regular open inspections?…

  In Vic, being tenant you can only negotiate to change the date of inspection. But can not deny the entry as long they (agent/landlord) gives you atleast 24 hr notice. It will be held against you, breach of contract condition.

  I have been through this, it was not nice experience at all. Every saturday 30 minutes inspection went for 5 months and we only get approx 5 months of peaceful living out of 11 months of our stay there.

  If you are not buying then consider moving out.

• 

  horsome on 24/02/2014 - 00:37

  It happened to me and my wife at a unit we were renting, but we were renting privately.

  We were able to break the lease and moved elsewhere. We had multiple motives but a general one was that we did not want strangers walking through our home unattended.

• 

  cureforanitch on 25/02/2014 - 22:44

  When reading the factsheet that mini2 has referenced above, it states clearly that "Your agreement cannot be terminated because the premises are being sold." This being when on a fixed term agreement, which I am. My tenancy agreement quite clearly states a 1 year term.

  Interestingly I asked them to add "Property will not be advertised for sale during the term of the lease". The property has already been listed, and essence they broken the agreement. What does that mean for me?

  As an update, my agent has told me that they want to hold an inspection this weekend, and has emailed me to confirm approval. By accepting the inspection, am I agreeing to allow the property to be sold, thus voiding my right to push back if only a owner/occupier buys the place?

  • 

    Speckled Jim on 25/02/2014 - 23:11

    +1

    The property has already been listed, and essence they broken the agreement. What does that mean for me?

    Check with the Tenancy Union. There are limits to the number of inspections per 24 hours, but it varies from state to state.

    From Tenants NSW. Copied from the table.

    Purpose
    To show the premises to prospective buyers

    Maximum frequency
    2 times in any period of a week

    Minimum notice
    Before first showing: 14 days written notice of intention to sell, then
    before each showing: as agreed, otherwise 48 hours notice each time

    am I agreeing to allow the property to be sold, thus voiding my right to push back if only a owner/occupier buys the place?

    Whether you assert the no-sale clause mentioned above or not, the new owner will simply be receiving the rent from the managing agent. There should be no difference to you, the tenant. They can't evict you to move in — the tenancy agreement stands.

    Have a look at property sale pages. They often mention "leased until (date) and tenant keen to renew, or you can move in" (after the current agreement).

    The only exception I've found is in the case of mortgagee repossession.
    Other info at http://www.fairtrading.nsw.gov.au/ftw/Tenants_and_home_owner…?

    • 

      NosDan on 25/02/2014 - 23:55

      They can't evict you to move in

      are you sure of that? source?

      might be different state to state or may have changed since, but in SA im 99% sure that if the new owners want to move into the apartment they can evict you…… a new landlord can not evict you tho, only if the person wants to be owner/occupier

      you are correct tho that the lease does sell with the house

      • 

        Speckled Jim on 26/02/2014 - 00:04

        Termination for sale of premises
        Fixed-term agreement

        Your agreement cannot be terminated because the premises are being sold.

        About halfway down

      • 

        NosDan on 26/02/2014 - 00:08

        yes, like i said to you…. i completely agree with this and have been through this exact scenario twice in my time renting. when the property is sold the lease carries….

        but that does NOT answer about what will happen if the new owner wants to occupy the property they have just purchased and i beleive this is a different situation (at least that was what i was advised here in SA when i went through the process (admittedly 10+ years ago, so maybe things have changed?)

      • 

        Speckled Jim on 26/02/2014 - 00:44

        What the new owner wants has no bearing. The Tenancy agreement is a legal document that can only be dissolved under certain circumstances; those spelled out in the Act, by Tribunal or by Court order. If it's leased for a fixed term and new owners want to move in, they have to wait.

        The agent has a duty of disclosure on whether the property is occupied or not, so prospective buyers know beforehand. If that's omitted from an online ad? Not sure that's grounds for anything — agents aren't known for their grasp of timely or accurate information, especially online ads.
        Most buyers should know after first contact with the agent. If not, the agent is clueless, dodgy or mentally impaired.

        Try to find a clause in the NSW Act that says a buyer can turf out a tenant because they want to move in.
        Except in the case of a Mortgagee repossession, you won't.

• 

  cureforanitch on 25/02/2014 - 23:43

  mcmonte, thanks for the advice

  The only notice received was yesterday requesting access this weekend via email. I am yet to respond

  Looking at the listing online there is no reference to "currently tenanted" or equivalent.

  The more I read up, the more I realise how little these guys know about what the process is. He even said to me on the phone on Monday that he only needs to give me 30 days notice. This is quite obviously incorrect.

  I'm going to write an email tomorrow granting access this weekend as a show of good will. I want to avoid given them any cause to invoke termination notice for breach of agreement, and also make myself look good if this (heaven forbid) ends up at a tribunal

  I'm also going to outline a few key points from the Residential Tenancies Act 2010 that clearly state a fixed term lease cannot be broken for a sale. I will also be requesting a rent reduction for the period of inspections. Anyone got any ideas on a reasonable amount? 10%?

  As an aside, lets just hope my agent isnt an Ozbargain-er!

  • 

    NosDan on 26/02/2014 - 00:01

    I'm going to write an email tomorrow granting access this weekend as a show of good will.

    i would be getting legal advice about that beforehand. you could be setting a precedent etc. there is no such thing as good will when it comes to land agents or landlords ive found

    clearly state a fixed term lease cannot be broken for a sale.

    as i have already said twice, this is true. but it changes if the new owner is buying the property to occupy themselves. if i was you i would call up the tenancies tribunal (or who ever it is you call these days) and specifically ask what can happen if the new owner decides they want to occupy the apartment themselves after its sold.

    edit: and the fact you say the ad dosnt say antying about it already being tenanted leads me to believe they are trying to sell it to a new occupier

• 

  Speckled Jim on 26/02/2014 - 00:15

  He even said to me on the phone on Monday that he only needs to give me 30 days notice. This is quite obviously incorrect.

  What do you think they mean by that? To vacate? They can't.

  Fixed-term agreement

  The landlord cannot end your agreement without grounds before the last day of the fixed term. If the agreement does not terminate at the end of the term, it automatically becomes a periodic agreement.

  If the landlord/agent wants to end your agreement at the end of the fixed term, they must give you at least 30 days notice that includes the last day of the term.

  If the landlord applies for a termination order, NCAT must terminate the agreement.

  But if you decide the property sale is too disruptive and want to move out, you actually have the upper hand:

  When a property is put up for sale
  If a landlord notifies their intention to sell the premises during the fixed term of a tenancy agreement and did not disclose the proposed sale before signing the agreement, the tenant can terminate the lease with 14 days notice and doesn't have to compensate the landlord for the early termination.
  Source: This NSW Fair Trading page

• 

  cureforanitch on 26/02/2014 - 00:31

  I'll make some phone calls to NSW Fair Trading and the Tenants Union tomorrow.

  They are clearly quite desperate to sell this place. Theyve left the wording very open on the listing, and seem to be hoping that I'm not aware of this 14 notice period.

  I'm inclined to use this weekends inspection as leverage for a rent reduction in the interim. If they dont agree to it, i'll invoke the 14 days and they need to wait longer to get potential buyers in. Time they may not have.

  I'll also look to negotiate an agreement where if an owner/occupier purchases the property, we either stay as per our current lease, or we define a $$$ value for relocation costs if we are asked to move. If its an investor, no change and we continue on the lease

  • 

    Speckled Jim on 26/02/2014 - 00:51

    +1

    I'm inclined to use this weekends inspection as leverage for a rent reduction in the interim.

    In the eyes of the Law, this is a shakedown. They have a legal right to show the property twice a week providing they give notice outlined above. There's no mention of this type of financial consideration in the Act, and you can bet they'll try to use such a proposal against you in the future.

    Although they can't legally evict you, they're experts at bluffing and entrapment.

    • 

      NosDan on 26/02/2014 - 01:36

      yea make sure you get an agreement from them on a rent reduction etc before you agree to help them. once you agree to let them in they are under no obligation to give you anything in return

• 

  Jared17 on 04/03/2014 - 00:02

  I had this happened to me before and it was stressful. Except in my case the unit was foreclosed by bank and I had not much options really

  • 

    cureforanitch on 06/03/2014 - 22:23

    What happened in that scenario? Did the bank become your "landlord"?

    Did you get anything from the landlord RE relocation costs etc…?

    • 

      Jared17 on 09/03/2014 - 02:13

      Actually I think the bank forced the owner to sell. I had to cut short a holiday when the agent true frantically to get in touch with me. Lucky for me it took only one viewing. I never dealt with the previous owner face to face. Only through the agent. The new owner lived downstairs. He let me continue with my rental although my rent was increased. 2 years later he moved in and I moved out. The agent was really pushy and I'm glad I will never deal with him again.

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  mini2 on 05/03/2014 - 17:46

  If I was the landlord I'd provide some sort of inducement to convince you to move on…whether that be rent free period (agent hates that) or slip you a cheque for a few grand to ease the pain. That's only IF a buyer has presented themselves and their sale condition is vacant possession.

  Then again it could be more beneficial to sell the property with the rental agreement in place…

  Worst case scenario is all these open houses happening and 3 months before the lease expires, a notice to vacate will appear.

  Unless you're going to buy your house soonish, a rouge agent can submit an entry for you onto TICA and provide a crappy reference. Have fun finding another rental after that.