VIC Ending lease prematurely on services apartment

Discussion in 'Property Management' started by DrunkSailor, 21st Apr, 2019.

Join Australia's most dynamic and respected property investment community
Tags:
  1. DrunkSailor

    DrunkSailor Well-Known Member

    Joined:
    25th Jun, 2017
    Posts:
    756
    Location:
    Melbourne
    is it possible to end a lease on a serviced apartment early? For example, the lease expires on 2025 but you want to move in as an owner occupier by 2021. Is it ever an option even if you were to pay a cancellation fee?
     
    DrunkSailor, 21st Apr, 2019
    #1
  2. thatbum

    thatbum Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    5,850
    Location:
    Perth, WA
    The details would most likely be in the contract. Or you would need legal advice on the possibilities and penalties for repudiating the agreement.

    Most of the places aren't even zoned for use as a residential dwelling though - you wouldn't be allowed to move in anyway.
     
    thatbum, 21st Apr, 2019
    #2
    Michael Mitchell likes this.
  3. DrunkSailor

    DrunkSailor Well-Known Member

    Joined:
    25th Jun, 2017
    Posts:
    756
    Location:
    Melbourne
    Am told I can move in after 2025. That’s too far for me but could wait until 2021 if willing to end lease early.
     
    DrunkSailor, 22nd Apr, 2019
    #3
  4. thatbum

    thatbum Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    5,850
    Location:
    Perth, WA
    ...for 3 months at a time?

    Did the agent tell you that? Seriously, a serviced apartment is quite a different planning use from residential dwelling, even if they physically look similar. I wouldn't be touching anything like that without serious DD into the planning aspects.

    And on top of that, you have the issues with with whether or not you can even terminate the long term lease in the first place. My bet is that you can't. You'll need very good legal advice on this as well.
     
    thatbum, 22nd Apr, 2019
    #4
    Michael Mitchell likes this.
  5. The Y-man

    The Y-man Moderator Staff Member

    Joined:
    18th Jun, 2015
    Posts:
    13,525
    Location:
    Melbourne
    @DrunkSailor

    Also remember in a serviced apartment scenario, the val could be done on a commercial basis. So once the lease ends, there may be a need to reval/refinance as it converts to a vanilla resi.
    The val on the vanilla resi may be a fair bit lower as the original purchase price would factor in the long lease.

    The Y-man
     
    The Y-man, 22nd Apr, 2019
    #5
    Michael Mitchell likes this.