AALLIIParticipant@aalliiJoin Date: 2012Post Count: 37
Managed to get a decent deal with a house purchased, but settlement to take place a little later.
Current owners (until settlement date) are happy to receive a very small amount of rent per week if I rent it from them until settlement.
Property is for investment purpose and I'm considering sub-leasing it to someone else in the market for a market rate of rent,
what things should I be looking out for? I guess the catches in the deal re: sub-leasing…DWolfeParticipant@dwolfeJoin Date: 2009Post Count: 1,253
In a normal lease you cannot sub-lease without the owners agreement.
In this case I would say, no-no. Questions you need to ask are, what happens if you lease it, then settlement falls through? How will you then easily evict your tenant? What about a bond? If the tenant causes damage, and settlement falls through, then what? As you are not the owner of the property legally you can't sign on the lease. You will have no legal recourse, you have no paperwork. If you want to lease it, be open with the vendor and explain that it is to be used as IP and that you wish to advertise for a tenant and get one during the settlement process. Encourage them, through the agent, to get a tenant (they will get the rent of course) but they will also pay for the leasing fees etc, and you can then have a legitimate lease when settlement goes through.
Good luck, keep us posted!
DAALLIIParticipant@aalliiJoin Date: 2012Post Count: 37
Oh I should have made it more clear, the current owners have purchased a new house and want to vacate the property and they are afraid that if they lease it to someone else, the property may be damaged and consequently until settlement will be liable to fix any damage (due to a very long settlement). In fact the current owners have suggested this, for me to take responsibility of any damaged caused by new lesee and in return extinguish the current owners from responsiblity.
I am thinking of writing up a simple contract where this fact is clear, that my intention is to sub-lease it out to another person.