Buyer wants to rent before settlement

Hi,

I have a property for sale.

Have been offered a conditional contract subject to sale of his property. Buyers property didnt sell at auction and probably unlikely to sell any time soon and will probably delist it.

Buyer still wants my house and can access his superannuation in September 2019 and pay shortfall then (is a cash contract).

Buyer now wants instead to rent my property and settle on my property when he can access his super in September. Doesn't want to have to move twice, and has a cat, which some landlords don't accept.

All sounds very messy to me.

Anyone gone down this route before? Renting to your buyer?

Its only been mentioned in a phone conversation with my agent with no new contract conditions on paper as such.

 

I'm confused. Is this a buyer subject to sale, or an unconditional sale contract?

 

The original contract was subject to sale of property. Now it appears that the buyers property is unlikely to sell (passed in at auction on weekend), the buyer wants to change the contract to an unconditional contract, with settlement now in September, rather than in May, if he had sold his property.

Except now, the buyer wants to rent my property from May until when he can access his superannuation in September and will then be able to settle. A long settlement for me is no problem.

My concern is renting my property to the buyer, even with an unconditional contract. Tenants look good on paper but you only find out how much of a headache they are once they move in

 

Take a 25% deposit.

 

We did this last year with no problem. Our conveyancer was a solicitor and made sure everything was sorted in our favour. Contracts were exchanged with a delayed settlement of 3 months. The buyer paid commercial rent and all bills and out goings until settlement.

 

By commercial rent do you mean you got significantly above normal rent for your property as an inconvenience for your troubles?

 

No it was a good market rent. We were not significantly inconvenienced, it was only 3 months. They paid the rent in advance from memory. It was an apartment and they paid all the bills from the day of exchange including strata, council and water rates etc. Initially we were nervous too. The solicitor made it that the property was what it was the day contracts exchanged so there would not be any negotiation about price if they found faults while they were living there. It all worked out well for everyone and we were happy.

 

About the only risk is that they hit you up for unreasonable maintenance - not really a high risk and maybe you can contract it out somehow

 

That was covered in our contract with the buyer. Property was as is when contracts were exchanged. All maintenance was the buyers

 

Wouldn't worry me too much, especially in a declining market, lock in your sale price. I think I'd want to know specifics about the Super though, what if he cant access enough to settle?

Ask you solicitor to draw up a licence though, (do they do that in all states?), in Vic, when we have let people in early into properties we've sold (even if under a ease/rent), it's been done under license which from what I understand is basically like settlement but without the money. I.e. they house becomes their responsibility from day one and they can't come up with some lame excuse once they've moved in (like they don't like the traffic noise, or the wallpaper) and use it as an excuse to try and get out of settlement.

 

Licence was what it was, thank you @Propagate this was NSW

 

Not a big deal. Spend a bit of extra money if you have to to get the sale contract properly written. Take a deposit and make sure they release it to you, that way they've put money on the table.

 

We allowed a buyer to move in early when our settlement was held up. Just ensure your house insurance is sorted and THEY take out their own insurance and all liability from the day you exchange contracts.

 

Yes - as an insurance consultant I've often had clients in exactly that position (the purchasers) call up to insure from the moment they move in, despite delayed settlement. They always say the vendor required them to do it as a condition of renting pre-settlement.