Best way to pursue unpaid rent after house sale?

Complicated.....

We just sold a house, settlement yesterday, but it was originally due to complete on December 6th so I told our tenant that he only needed to pay rent until then (unless something prevented settlement from going ahead, which it then did!).

On the 6th when I found out the sale would be delayed, I emailed & texted the tenant letting him know there would be additional rent due. And he completely ignored me!

We asked for the unpaid rent amount to be included at settlement but purchasers refused & we went ahead and completed anyway in the interests of getting it all over and done with finally! Tenant is staying in the house and they're "happy" to take him on, even knowing that he hasn't paid any rent from the 6th....

Is there any way we can still pursue the tenant for the unpaid rent he owes us?! It's only around $500 but it's more the principal of the whole thing.... that he's gotten away with almost 2 weeks of free rent!

 

They complied with your directions - never tell the tenant when settlement may to occur, especially if self managing. If they have paid the rent in advance to you, then your solicitors can advise the buyer.

Have you signed over the bond to the new owner? There's your course of action.

 

No I haven't transferred the bond over to the new owners yet. But I called the RDA to ask if I could claim the unpaid rent before I transfer the bond & was told no.... making a claim against the bond can only happen at the end of the tenancy apparently?!

 

Yes sounds like you might have waived the rent

 

Yes, part of me really wants to leave it and move on but the other part doesn't want this jerk to get away with it!

How does transferring a lease agreement even work? Won't the new owners draw up a new lease with their names on it, rather than use the one we sent their conveyancer with our names/bank account etc on it??
So in that case, they can ask him to lodge a new bond as well, leaving me able to terminate the bond we're holding & claim the unpaid rent through it?

From what I was told by the RE agent, they're planning to lower his rent anyway so our current lease agreement won't be used??

 

There was no reason for the new owners to agree to it being sorted at settlement as they weren't receiving rent from the tenant either. Good luck to them being able to take out Landlord insurance
I gather you are self managing because there does seem to be some steps missing to sort out the transfer of lease to new owners. The lease won't be ending as you haven't followed any steps to end the lease such as giving notice to tenant etc so the lease will be transferred to new owners therefore it's unlikely you will have the ability to take money from bond.

Firstly are you quite sure they are behind? Most people are paying rent in advance so even though they didn't pay on the 6th they may still be in credit - or did you take that into account and give like a daily rental amount to work out what they needed to top up?
Normally at settlement you may need to transfer some of the rent money to the new owners due to the settlement taking place during that period. You are entitled to pursue the tenant if you wish. Even though you are no longer his landlord all the usual pathways are open to you and should be used if you wish to.

 

He was paying fortnightly in advance, so yes, his last payment to us was 22 November which covered the fortnight up until 6 December..... I've asked him for 11 days rent to cover until 17 December, the day the property settled.

It's the lease transfer situation that's confusing me now.... if they're planning to heavily amend our Agreement (if they're not legally allowed to draw up a whole new one) to lower his rent then won't the bond amount need to be lowered as well? So instead of me transferring it to them, I'll edit to end it early & claim the unpaid rent against it before the balance gets returned to the tenant? And they can ask him for a new bond amount & lodge the new bond themselves??

 

No, the bond stays as lodged. I trust that you have lodged the bond. You fill in a transfer of bond form & send it to the purchaser. Who is wanting to amend the lease?

Good luck with that.

 

Yes, we lodged the bond! It's not a form to transfer it, it's just a few clicks on the website to transfer to the purchaser.
The purchasers want to amend the lease, I was told this by the selling Agent as they were originally going to become the PM but buyers have since decided to self manage. I guess they literally just cross out our info on the lease agreement & replace with theirs??

 

no, they would take on your lease. Its an 'assignment' with you directing the tenant to start paying the new owners.

 

Yes, but if they are wanting to change the terms of the lease, as I've been told they do, how do they do that? Changing the rent amount to be paid AND changing it to a head lease arrangement apparently?!
My point is - if they're allowed to change the lease agreement why am I not allowed to claim against the bond & they can lodge a new bond to match their new lease agreement?

 

You’re not allowed to end the lease because you haven’t given notice nor is it by mutual consent. It is too late now to do that.
If the new owners want to change it then they may by following the hopefully correct procedure which might be a variation to the lease by mutual consent. Even if they cancel the lease by mutual consent and write up a new one you cannot claim the bond because your lease rights end at settlement. You will be legally obliged to transfer the bond as is

 

Plus TassieGal appears to have told them that they didn't have to pay the rent until after settlement. Rent had been waived by mutual agreement.

 

You bear some of the responsibility for your present predicament, put it down to experience and move on ...

 

I never told the tenant that he didn't have to pay rent until after settlement. I told him that if nothing happens to prevent settlement happening on Dec 6th, then his last payment on Nov 22nd would be the final payment to us.
But then of course something did happen to prevent settlement on Dec 6th (several delays all caused by the purchaser) & I told him he'd need to pay rent as usual until the date that settlement happens. So I confirmed the full amount payable by him (11 days) and he continues to ignore me & not pay....

How ridiculous that he can just get away with it!

It does get a bit more complicated too... the contract of sale actually says vacant possession, the tenant originally was happy to vacate early but the buyers said they very much wanted him to stay & the contract was never amended

 

have you sought legal advice?

 

Yes, our conveyancer is aware of the whole situation, of course, and she originally advised that we may need to just let go of the unpaid rent. But I'll be calling her again tomorrow just to make sure there's nothing fairly "easy" that we can do to make this tenant pay his rent as he's obliged to do!

 

it sounds like you haven't sought legal advice. You need a solicitor. Conveyancers just transfer title.

 

I don't know all the technical terms! It's a law firm & the woman we use for conveyancing specialises in property law, commercial law & estate planning. Her job title is 'Principal' so I think she's a solicitor?!