Can I sell IP with tenants still on lease?

Hi all,

I'm curious, can I sell my IP with tenant still leased until June 2017? Does that give the tenants the right to terminate the lease earlier without penalty? Just trying to working out what impact it'll have once we start notifying and advertising the IP

 

Of course you can.

Important points -
-Tenant and lease goes to new owner as is.
- Management agreement terminates.
- give tenants notice of intention to sell and of open times. These vary a bit between states.

Here's a tip prepared earlier -
Tenancy Tip Thursday - Selling an investment property

 

Yes you can.

It is not ideal as you will turn away some buyers.

 

Nice thanks a lot... I'll have a read of the link you posted

 

In your post about noticed, you mentioned that this is not limited to 2 months in NSW... Does that mean if I decide to sell they can leave?

Notice to let the tenant know varies a little between states - 14 days written notice is provided before listing the property for sale, aka signing an agency agreement with a sales agent. During this time you can't advertise the property or allow inspections. If you list the property for sale (note list, not actually sell) within the first 2 months of a tenancy, they can exit the lease without penalty if they were not advised of that intention before entering into the lease. In NSW this is not limited to 2 months.

 

I looked at a property, as a potential PPoR, a few years ago that had tenants in it while they were trying to sell.

The tenants chose (refused) to leave the place during the OFI, so when we walked straight in the front door, they were all laying on the lounges watching the tv. Had to walk between them and the screen in order to get to the rest of the place. Awkward.

Plus the sink was full of dishes and the general state of the place was pretty gross. Can't imagine the owner would have been too impressed, and the poor selling agent really had a tough time - trying to point out the property's features, with flies buzzing and feral tenants within earshot, was no mean feat.

Thankfully, I could see past all that, but some buyers would have been put off, for sure.

 

Crap that doesn't sound good... Fingers crossed we don;t have the same problem

 

We had a tenanted property for sale.
Tenant up and left.
PM managed to negotiate with the tenant to retain two weeks rent from the bond in lieu of notice, but told us we had no further recourse.
To claim at the tribunal, we would have to prove we tried to find a new tenant, clearly impossible with a property for sale and very unattractive to any tenant as the remaining part of the lease was around 9-10 weeks.
Just be aware....
Marg
(But thankfully we had a fairly quick sale)

 

Its often preferable to punt unco-operative tenants prior to sale as they can really make a sale a hard job. Certainly presentation suffers !! Others can be gold if they are good long term tenants . I sold a rental with a tenant and she was just lovely. Her only request was we gave her at least 6 weeks. Lucky a couple planning to rent it for 6 months bought and she stayed on. Both happy. It can enhance the buyers appeal that the place is looked after. Great for an investor to buy and see what they are buying is lower risk. But houso tenants can stiffle a sale.

 

Thanks guys... Well I'll advertise it mid Jan and fingers crossed they'll be ok about it

 

We have inspected tenanted houses during advertised open house times.
One had a bedroom closed off, no one allowed in as the tenant was sleeping.
Another had the bathroom door locked, tenant having a shower!
Pick of the bunch was one with an unflushed toilet. But I blame the agent for that one, not the unflushed toilet (!) but for not doing something about it before letting people in as the smell was right through the house.
Marg

 

Yes. I have done it. No real issues

 

I've just sold ( under contract ) an ip myself. The tenant was on a week to week lease as I didn't re new when the lease ended because I knew I was putting it on the market and not sure if an investor was going to buy. It all worked out ok with an investor buying and wanting the tenant to stay on long term. I was advised about notifying the tenant but forgot all about it to be honest. The RE who managed it weren't too happy I sold it myself but I explained to the buyers that I was saving on the agency commission and passing it on hence the lowish price. That's the 2 nd one I've sold myself and saved about $15 k all up.