All Topics / Help Needed! / Subject to Tenancy

Viewing 8 posts - 1 through 8 (of 8 total)
  • Profile photo of kateej03kateej03
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    @kateej03
    Join Date: 2011
    Post Count: 112
    February 16, 2012 - 7:20 am

    Hi,

    I'm about to put an offer on a house that has great rental returns, my question is can you have the offer subject to the tenants staying on once the house is sold, or is the lease the tenants have signed valid for new owners? It's probably unlikely the tenants will move out but just in case.

    Thanks,

    Kate

    Profile photo of Jamie MooreJamie Moore
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    @jamie-m
    Join Date: 2010
    Post Count: 5,069
    February 16, 2012 - 8:06 am

    The lease that they signed will still apply.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of kateej03kateej03
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    @kateej03
    Join Date: 2011
    Post Count: 112
    February 16, 2012 - 8:13 am

    Thanks Jamie!!

    Profile photo of PaulliePaullie
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    @paullie
    Join Date: 2009
    Post Count: 217
    February 16, 2012 - 8:14 am

    On one deal, I included a condition that the tenant accept a $100 rent increase. It worked.

    Do you want the tenants to stay?

    Profile photo of kateej03kateej03
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    @kateej03
    Join Date: 2011
    Post Count: 112
    February 16, 2012 - 8:20 am

    Yes definately want them to stay, they have just had an increase while the house has been on the market so very good returns.

    Sounds like a good deal, were they paying under market value?

    Profile photo of PaulliePaullie
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    @paullie
    Join Date: 2009
    Post Count: 217
    February 16, 2012 - 8:26 am

    oh yer, they were paying 220, put it up to 320.

    If you happy for them to stay on, then its good, especially if your happy with the returns.

    Profile photo of Matt_ArnoldMatt_Arnold
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    @matt_arnold
    Join Date: 2006
    Post Count: 142
    February 16, 2012 - 10:19 am
    kateej03 wrote:

    Hi,

    I'm about to put an offer on a house that has great rental returns, my question is can you have the offer subject to the tenants staying on once the house is sold, or is the lease the tenants have signed valid for new owners? It's probably unlikely the tenants will move out but just in case.

    Thanks,

    Kate

    Hi Kate

    What state are you in ??

    In NSW, the lease remains in place despite a change of ownership.

    Having said that, the laws were relaxed a lot last year in the favour of the tennant. The new laws basically allow the tennants to break the lease with a 6 week break fee penalty in the first half the lease, and a 4 week break fee in the second half of the lease.

    Also – are the tennants on a fixed term lease, or are they on a expired lease – once again this has implications.

    I would be pretty hesitant buying any property where the numbers only work based on a tennant paying above market rent…

    Matt

    Profile photo of kateej03kateej03
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    @kateej03
    Join Date: 2011
    Post Count: 112
    February 17, 2012 - 12:24 am

    Hi Matt,

    It's in WA, the tenants have just signed a new fixed term lease while the house was on the market. It is tenanted by a company in a mining town so it's highly unlikely they will want to leave, I just wanted to double check in case.

    I don't believe they are paying over market value, it's about the average for the town.

    Kate

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