Landlord Decides to Sell The Unit I Am Renting

Hi All

Just need a bit of advice from the people on the forum. so heres is the story; I have been renting an appartment in Sydney's West since December 2015. Initial lease term was 12 months and it expired in January 2017. At the end of the lease Landlord gave us a notice to increase the rent and also asked to sign another lease. I renewed the lease for another 12 months in February 2017 and it will expire Feb/March 2018.

So on last Friday I got a letter in the post from the real estate agent informing us the landlord has appointed them for selling the unit I am renting. They offered me to buy it (lol) and said if I am not interested in buying to be cooperative in showing the place upto twice a week to the prospective buyers. a legislation was also quoted which said the same thing .Section 53 of the RTA2010 :(4) A tenant is not required to agree to the residential premises being available for inspection by prospective purchasers more than twice a week.

Long story short is there a way i can terminate the lease, I realise the unit could be on the market for months and allowing inspections twice per week would be so inconvenient. So i was thinking if section 100 applies to this situation and i can terminate the lease because of that ? I would be grateful if you guys could share you experiences if you have ever been in a situation like this or what is your interpretation of the legislation. Many Thanks.

Section 100: Early termination without compensation to landlord
http://www.legislation.nsw.gov.au/#/view/act/2010/42/part5/d...

(c) that the landlord has notified the tenant of the landlord’s intention to sell the residential premises, unless the landlord disclosed the proposed sale of the premises before entering into the residential tenancy agreement as required by section 26.

Section 26:
(2) Disclosure of sale, mortgagee actions A landlord or landlord’s agent must disclose the following to the tenant before the tenant enters into the residential tenancy agreement:
(a) any proposal to sell the residential premises, if the landlord has prepared a contract for sale of the residential premises.

Comments

  • +1 vote

    Asking Ozbargainers for their interpretation of the legislation? :) You're brave!

  •  

    Looks like this is exactly what section 100 is there for, check with your local consumer advocacy group but I think you have grounds to terminate and get the hell outta Dodge!

    • +1 vote

      thanks good idea, I will call the 'Sydney Tenants advice and advocacy service' helpline for advise.

  •  

    Yep, this is exactly what this section is for. It stipulates that you need to give at least 14 days notice, so obviously the smart thing to do would be to start looking for another place to rent and only give notice once you have another place lined up, because once you terminate the lease is over and you have to be ready to get out.

    •  

      thanks. but do you think it also covers the scenarios where the decision to sell was made after the signing of the lease ? for example the LL could say I had no intention to sell when you signed the lease but now i want to sell.

      and good suggestion that's what i will be doing once I am sure i can terminate the lease. Secure a new place and then give a notice.

      • +1 vote

        Don't worry about it. That kind of excuse wouldn't fly. The point is, they didn't disclose they were selling prior to signing. Their intent is irrelevant.

        • +2 votes

          Thanks for the help. I guess you are right.I have also found a case study, confirming what you said, on NSW civil and Administrative tribunal site regarding a scenario like mine. Just posting it below so it could be of help to someone looking at this in the future.

          Source: http://www.ncat.nsw.gov.au/Pages/cc/Divisions/Tenancy/tenanc...
          Text:

          Unexpected sale of property

          Under the Residential Tenancies Act 2010 a landlord has an obligation to disclose a proposed sale of the property before entering into a residential tenancy agreement. Otherwise the tenants may terminate the tenancy during the fixed term without being liable to pay any compensation or additional amount for the early termination of the agreement.

          A young family signed a 12 month fixed-term tenancy agreement via a real estate agency to rent a house. Six months into the tenancy, the family received correspondence from the agency stating that the landlord had instructed them to place the property on the market and that they wished to conduct open house inspections every Saturday, and a second evening inspection during the week until the property was sold. This was the first time that the tenants were made aware of the landlord’s intention to sell the property.

          After seeking independent legal advice, the tenants gave the agency a written notice advising that they sought early termination of the tenancy under section 100 of the Residential Tenancies Act 2010. The agency then lodged an application to the Tribunal on behalf of the landlord seeking orders to stop the tenants from terminating the tenancy and to pay compensation for any loss caused by the abandonment of the premises.

          At the hearing, the Tribunal Member determined that the tenants’ notice of termination was valid as the landlord had not informed the tenants, prior to entering into the fixed term lease, that the landlord intended to sell the property. The Tribunal also found that the tenants had complied with all the provisions of the Act in serving the notice of termination and vacating the property.

          The Tribunal determined that the tenants were allowed to vacate the property without penalty and orders were made dismissing the landlord’s application.

        • +2 votes

          So the main thing you have to do is make sure you give proper formal notice and tick all the boxes. Don't just call them. Write and send a proper signed letter stating you are terminating pursuant to section 100 of the Residential Tenancies Act, that this letter constitutes 14 days' notice. Accordingly the lease is terminates on X date, by which time you will vacate and hand over vacant possession and pay up all the rent to that time.

          Also make sure you comply with a final cleaning and whatever else is required of you, because all that stuff in the lease still applies, so they don't find an excuse to screw you over or try and keep your bond, since they might be pissed off that you're terminating.

        • +1 vote

          @Shortnsweet:

          good suggestions. thanks , i found the Standard_notice_to_terminate_tenancy_agreement_for_tenants on fairtrading website which has everything done for me , all i have to do is sign and tick the proper box :)

          I have the pictures from the in-going condition report and the unit is in far better state (cleanliness wise) now then how i found it. So i think all i have to do is have the carpet steam cleaned and I am good.

      • +2 votes

        You are covered and allowed to give 14 days notice as long as they didn't inform you that they were planning to sell before you signed the lease.

      •  

        Yep, like the other person said, it doesn't matter when they decided to sell. As long as you weren't informed when you were signing the lease, you're fine.

  • +1 vote

    There is a reasonable chance the landlord will agree to terminate the lease as vacant possession generally makes the place easier to sell anyway.
    You never know until you try.

    • +1 vote

      Yes but he doesnt know how long it is going to take for his unit to sell which means loss of income if he allows to break the lease.

      but you are right i will never know until i ask, so i will ask.

      •  

        actually, tenanted is easier as investors and prospective buyers often use the existing rental income for their LVR and future budgetting

        •  

          Tenanted is great if you're an investor looking to keep the place rented out. Not so good if you're looking to buy for your own residential purposes.

        •  

          @Seraphin7:
          Not a big concern, existing tenants have no rights if new owners want to occupy, it still provides an indicative representation of value

  •  

    Sorry to hear about your predicament. I am in Qld so can only share what I know here. Please find out whether your State has similar law.

    Sounds like you only renewed in Feb-2017 and they told you about the sale now, which is less than 2 months. In Qld law, the Tenant can walk out without breaking-lease if this happens. Extract and link below.

    "Tenant has just moved in or signed a new agreement
    If the property is advertised for sale or the property manager/owner enters to show the property to a prospective buyer during the first 2 months of an agreement (including a new agreement), and the tenant was not given written notice of the proposed sale before entering into the agreement, the tenant can end the agreement by giving a Notice of intention to leave (Form 13) with 2 weeks' notice."

    https://www.rta.qld.gov.au/Renting/During-a-tenancy/When-a-p...

    Best of luck from me.

    •  

      Thanks for the good luck :)

      NSW does have a similar law
      (c) that the landlord has notified the tenant of the landlord’s intention to sell the residential premises, unless the landlord disclosed the proposed sale of the premises before entering into the residential tenancy agreement as required by section 26,

      section 26
      2(a) any proposal to sell the residential premises, if the landlord has prepared a contract for sale of the residential premises,

      but the landlord could argue that i had no intention to sell when the tenants signed a new lease so he couldn't have informed me at the time of signing the lease. I wonder if i could still use this rule to terminate if the decision was made to sell after signing the lease.

      • +1 vote

        If you do want to take this opportunity to leave, use it. It's pretty hard for the Landlord to say they didnt know they want to sell one two months before, unkess something really sudden or tragic thing happens.. ..

  • +1 vote

    Have you just asked? If they signed a 12 month lease a month ago, surely they would understand you wanting to leave.

    •  

      No , I have not yet but I will be asking. Thanks

  • +1 vote

    Sounds they purposefully got you to sign the lease beforehand, and then notified you of the owners intent to sell the property afterwards. What you quoted seems pretty self evident. If you want to cancel the lease, it is within your rights to do so.

    •  

      I think this is exactly what has happened. I guess a leased property is a good buy for the investors and could fetch a little more money hence the possible reason for lease renewal.

      I will be cancelling the lease as I don't want to go thru the pain of two inspection per week or even 1 .

      Thanks for the help :)

  • +1 vote

    From FairTradingNSW:

    When a property is put up for sale
    If your landlord notifies you of their intention to sell the property during the fixed term of your tenancy, you can end your agreement, without having to compensate the landlord for the early termination, by giving at least 14 days’ notice. However, this does not apply if before you entered into the tenancy agreement, your landlord disclosed the proposed sale to you for which a contract for sale was prepared.

  •  

    Just wondering if the new owners would be renting it out - if you don't mind renting under a new landlord?

    •  

      they dont have a buyer yet because they sent me a letter asking if i was interested to buy.

      I don't mind renting under the new landlord but the inconvenience of sale related activities is what is putting me off. RE agent quoted that legally they are allowed two house inspections a week until the apartment is sold. So not sure how long will the inspections will go for. Perhaps i can ask for rent compensation if the activity goes on for very long.

      • +1 vote

        offer them half market value! doesnt hurt to ask, worst they can say is no

        •  

          according to domain.com.au the 1 bdr 3rd floor apartment was sold in 2008 for $280,000 and is now valued between LOW $405k, MID $468k, HIGH $530k.

          so offering them half of the mid price does not even equal the amount the owners bought it for. I expect them to say no.

          What do you think will be a reasonable offer ?

        • +1 vote

          @Frankenbeanie:

          reasonable offer would be 100x your existing rent (that's how most purchasers work it to be relatively neutrally geared)

          so if you're paying 360$ / week, then offer 360k

          before you do though, ensure you have a reasonable deposit and get a pre-approval from the bank first (this doesn't guarantee that they will give you the money, just a provisional based on high level estimations) … since you're already there, they may even consider some sort of vendor finance

        • +1 vote

          @weezlebub: Very unlikely you'll get it at that multiple in Sydney at the moment. That mid-point figure of $468k sounds more typical for Sydney suburbs based on $360 rent.

        •  

          @Seraphin7:

          I was paying 345 before and now the new rent is 355 p/w.

          i think it would $425K mark, it would be interesting to see what price they advertise once the unit hits the market.

  •  

    I would suggest your Sect 26 might apply though hard to prove landlord was intending on selling at the time since they would not have entered into a 12 month lease again.
    ADVICE: Just run with it. Properties are selling very quickly at present and 90% of buyers are investors. So nothing much will change for you.

    •  

      If he's lucky some overseas/interstate investor will buy it sight unseen, thus avoiding any inspections.

      •  

        I read a case study (posted in the comments above) re this on NSW civil and Administrative tribunal site and they ruled in the favor of the tenant when the landlord decided to sell six months into the lease.

        I want to stay and not move because moving is a hassle but not knowing how long will it take for them to sell and if they can't sell it quickly I will have to allow them to do open house inspections most probably twice a week. It is a one bedroom apartment on the third floor(no lift) and rent will
        will not cover the mortgage repayments so not sure if this is an attractive property and would sell as quickly.

        • +1 vote

          Ask for a reduction in rent if you don't mind staying or leaving. The reduction in rent will ease the inconvenience of the inspections. Everything is negotiable ;)

        •  

          @Skimpywallet:

          I am aware of people negotiating a discount on rent or for a cleaner.

          Fact is they do not want you there during open for expection, so what else are you going to do during this time? Get a refund for the time you are unable to use the place and time you have to clean it before inspection. People are busy enough, I know my place only gets a big clean every weekend (if lucky). I would work out what you think is reasonable for your time to clean and stay away,

          I am not sure how you would go negotiating, but if your rent was reduced $20 every time they held an inspection (example only), would that change your mind about leaving?

          With that said, I once had a neighbor who had her rental put on sale. The landlord was a prick who would never fix the place. She ensured the place was never clean for inspection. Dirty dishes, shoes and clothes all over the floor and my favourite - a G string hanging from the shower head. She told me that she legally had to let them show it twice a week, but she simply said she was not cleaning on days to suit them without compensation, which never happened. This was in Victoria.

        •  

          @deal88:

          I am not good at negotiating face to face so I might have to write them an email asking for rent reduction.

          They haven't said what their expectation are of us at the time of the open house. But if they want us to clean and dont want us to be there it is only going to happen if there is compensation offered. If they are not willing to offer a reduction then I would do what your neighbor did.lol

          Yeah i would definitely consider staying if offered a rent reduction. Also I am planning to move to melbourne next year so I am reluctant to to move and a sign a new lease.

  •  

    Even if there was no law to help you move out for free, all you have to do is make your place a mess, strip down to your underwear, don't shower for a few days, cook some stinky food, put some death metal up loud, just in time for the buyers to turn up.

    I'm sure they will let you move out fairly quickly.

    •  

      Fish sauce and Asian favourite fruit durian should do the trick.

      But seriously, I would hope the landlord is reasonable and offer a discount, especially if he just put the rent up on a 12 month lease.

      •  

        @samfisher5986. haha love the suggestions . I dont want to be mean and want to help the landlord sell the place so I am willing to co-operate to an extent which doesn't affect me but if it goes over a month, I am gonnah have to start cooking some nasty smelling foods. lol

      •  

        @deal88

        I hope he offers me a rent reduction because even though the open houses havent started , the RE has started visiting, today was the first visit now they want to send a photographer to take photos of my belongings and the apartment. So definitely discount is warranted.

        but the thing is he doesnt offer I will need to ask and I am not sure how to ask without threatening to break the lease. *Reduce the rent or .lol

        •  

          There is no way he's going to offer of his own accord, why would he? You need to ask. Just say that this requires a significant amount of time and inconvenience for you to stay away from your home while inspections are being conducted, allow strangers to wander through and touch or look through your belongings, and to clean before each inspection. Mention that the residential tenancies act allows you to terminate with 14 days' notice for this, so obviously the law recognises that this is a major enough hassle that you are entitled to break the lease over it. Tell them you would rather stay if the place is sold quickly and there is minimal inconvenience to you, but that you think it would be reasonable for them to offer you some compensation by way of a rent reduction, especially considering you only signed the new lease 2 months ago and they raised the rent at that point. Just be polite and matter of fact, the worst they can say is no, and then you can reassess what you want to do.

        •  

          Regarding photographs - Read this article take from Domain

          However, the report recognised that your furniture and decorations say a lot about you as a person, from your economic status to your sexual orientation. Family photographs could reveal your identity, and victims of domestic violence, hiding from former partners, could be identified by their furniture.

          We know criminals scour the internet for possible victims, and someone might decide that your valuable possessions were too tempting.

          The comprehensive and detailed VLRC report, issued in May, recommended that landlords should have the right to take pictures for advertising purposes.

          However, tenants should be able to prevent their personal possessions from being photographed if they object, in writing, on the grounds of privacy or personal security.

  •  

    I'd ask for a discount of 25% in rent to put up with the open houses and then leave when I'd found a new place.

    •  

      I want to ask for the reduction too but isnt 25% too much .

      I am paying 355 p/w and 25% of that is 89 which brings the rent down to = 266 p/w.

      but I would love to see that happen. any suggestions on how to approach them to ask for reduction ?

      • +2 votes

        You are legally entitled to leave without penalty. They won't be able to rent it out so their choice is $0 or what you are prepared to pay with a discount.
        As a bonus you can offer to not sit around in your undies and cook Filipino dried fish every time they have a viewing.
        Start off at 25% and see what they come back with - and yes make sure it's all in writing.

  •  

    you might also want to consider if the property is sold and they say the new owner wants you to stay as a tenant,I know a few people who have been told this then given an eviction notice so they have to be out by settlement