NSW Asking whether tenant wants to renew

Discussion in 'Property Management' started by giraffez, 7th Jan, 2019.

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  1. giraffez

    giraffez Well-Known Member

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    How early before the lease expiry should I ask my agent to see whether the tenant wants to renew the lease?

    I can see pros and cons for an early reminder. In the current market, I want to leave it to the last minute as there are currently a lot of vacancies in the area. I'm thinking it's better to give them less time to think about so they have less time to go looking for something else. But how late can I leave this? If they decide not to renew, I need to issue a notice to vacate before the lease is up don't I?
     
  2. Shogun

    Shogun Well-Known Member

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    You need to give 30 days so about 4 weeks to vacate?
    Ask at 6 to 8 weeks? I would want to know so would ask at 8 weeks
     
  3. Marg4000

    Marg4000 Well-Known Member

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    Check with your state leglislation.
    Some have time frames to offer renewal terms, and you must abide by these.
    Marg
     
  4. giraffez

    giraffez Well-Known Member

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    Does the notice have to be served completely within the lease period? If i serve the notice before the lease expires (but the notice period spans across to after the lease has expired), isn't that still effective?
     
  5. Zepth

    Zepth Well-Known Member

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    Why not just let them stay on periodic if they dont wish to renew? I can only assume they are good enough tenants if you are considering re-signing them
     
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  6. giraffez

    giraffez Well-Known Member

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    Good question. I thought it was less favourable to the landlord to have the tenants on a periodic lease?

    One thing i can think of if I need them to vacate in the future, I will have to give them 90 days notice instead of 30. Is that all the disadvantage there is or is there more? Are there implications if they turn into a bad tenant and trash the place from a insurance/bond process point of view if there is no fixed lease?
     
  7. Zepth

    Zepth Well-Known Member

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    I would say kicking your tenant out when, as you say, "there are currently a lot of vacancies in the area" is likely to be less favorable to you but maybe that's just my opinion.

    Ask your insurance but I doubt it would make much of a difference to your cover from a trashing the place point of view, maybe it will be worse from a recovering unpaid rent point of view. If you feel like your current tenants are likely to do either of these things though I would not even be entertaining the idea of keeping them for another fixed term
     
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  8. giraffez

    giraffez Well-Known Member

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    Thanks makes sense.

    If in the future when market conditions are more favourable to me, can I still draw up a fixed lease even after then enter a periodic? Can rent increases still happen during periodic?

    I’m also interested to know from a property agent point of view, do you guys typically monitor the expiry of the fixed term lease and suggest the landlord to draw up a new lease or do you just let it fall into a periodic?
     
  9. Zepth

    Zepth Well-Known Member

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    Rent increases are easier during periodic. Just give the required notice for the state and then it’s done.

    A fixed term can be entered in to after it has gone periodic without any drama also.
     
  10. Marg4000

    Marg4000 Well-Known Member

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    Usually it does have to fall within the time before the lease ends.
    Otherwise it is invalid.
    But again, check the leglislation in the state where the property is.
    Marg
     
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  11. Scott No Mates

    Scott No Mates Well-Known Member

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    The 30 days notice only applies to getting vacant possession at the end of the lease term. If the tenant signs up for a new 12 month term, you cannot simply give 30 days notice to vacate in month 3 and expect VP, they are under contract to stay the whole term of the new lease. Where the lease goes periodic, then you may terminate with 90 days notice. The disadvantage is that the tenant only needs to provide you with 21 days notice vs your 90 days (reflecting that it is easier for the owner to plan for vacancy than for the tenant to move).
     
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  12. D.T.

    D.T. Specialist Property Manager Business Member

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    Fixed leases are way better than periodics. Got next 3 months worth of tenant end-dates up in our office to review whether renewal and/or increase should be recommended.
     
  13. Michael Mitchell

    Michael Mitchell Well-Known Member

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    I'm starting to make it SOP that I issue a notice to leave without grounds (end of lease) with every new lease, so they know straight up if they don't renew with a new fixed term they're not staying on as periodic.
     
  14. giraffez

    giraffez Well-Known Member

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    Why way better?

    I can see that the notice to vacate is shorter and that you know for sure that the property will be tenanted for that period (and can avoid vacancy during low periods like Christmas). But that is all?

    In my situation where I think that vacancy rates are high in the area and price increase is unlikely to happen (if anything rent will probably drop since so many vacancies), would you recommend to renew rather than to let it fall periodic? It’s a good tenant pays on time and I haven’t had any issues with since renting to them.
     
  15. Shogun

    Shogun Well-Known Member

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    It costs time and money to find a new tenant plus risk of vacancies.
    A good tenant in place is better than no tenant or an unproven one.
    To me a tenant in place is worth a small discount or the lower end of going rate for weekly rent. Can be cheaper than cost of finding a new one.
    A fixed term gives you security for that period of time.
    It is up to you. Risk week to week and them leaving on short notice or leaving because they don't want a fixed term.
    I decided on week to week and keeping mine.
     
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  16. giraffez

    giraffez Well-Known Member

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    In case anyone is interested, according to the tenancy act section 84 (1) and (2), I can provide notice anytime before the expiry of lease. The 30 days does not have to be served within the fixed lease period

    NSW Legislation
     
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