Long-term (2yrs+) Residential Leases - how common?

Discussion in 'Property Management' started by thesuperman, 18th Jan, 2020.

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  1. thesuperman

    thesuperman Well-Known Member

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    How common is it for a tenant to request a long-term (2yrs+) lease when initially moving into a property or for a landlord to accept an initial long-term lease requested by a tenant? Does the lease need to be registered and/or is it still considered a residential lease if it's a long-term lease?
     
  2. thatbum

    thatbum Well-Known Member

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    Not very common, but also not unheard of. Why would it need to be registered? Or why would it not be considered a residential lease all of a sudden? Odd questions!
     
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  3. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Many embassy/consulate staff leases are often 2 to 4 years

    ta
    rolf
     
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  4. Archaon

    Archaon Well-Known Member

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    "Breaking the agreement without penalty
    In limited circumstances, a tenant can break the agreement early without penalty. A tenant can give 14 days’ written notice to end an agreement early if:

    • they have accepted an offer of social housing (eg. from Housing NSW)
    • they need to move into an aged care facility or nursing home (not a retirement village)
    • the landlord has put the premises on the market for sale, and they were not told before signing the lease that the property would be sold.
    A tenant can give 21 days’ written notice to end an agreement early if:

    • they have a fixed term agreement of more than 2 years and they have been given a rent increase notice, or
    • their co-tenant passes away.
    If a tenant gives notice for any of these reasons, they do not have to pay compensation. A tenant is only liable for the rent until the notice ends and they hand back possession of the premises."

    This suggests to me that a 2yr lease is not a good idea.
     
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  5. Lil Skater

    Lil Skater Well-Known Member Business Member

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    For initial leases it’s not too common, much more common on renewals.

    Generally speaking I wouldn’t recommend a long term lease for the first term, unless it’s in an area with high turn over/high vacancy and they’re references are above and beyond. Last thing you want is someone locked into 2-3 years or more and they’re an absolute PITA.

    Interesting laws in NSW though, it’s different here in Vic and long term is classed as 5+ years and doesn’t presently fall under the RTA - however that will be changing in just a couple of months.
     
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  6. Beano

    Beano Well-Known Member

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    1:Very common to have a long term residential lease
    Eighty percent of my residential leases are long term ie 21yrs and over
    2:yes of course the lease is registered on the title
    3: I have just renewed a short lease for 12yrs . The solicitor did it and charged the tenant ..but this "short" one was a commercial lease. This is also registered on the title.
    4: yes it is still considered residential if it is long term.
    Question to you .
    Is the term "long term " related to the initial term or the total period of lease ?
    A "Glasgow" lease is 999 years is that considered long to you or short ?
    The Guinness lease is for 9,000 years is that long ? (Commercial)
    Ps I consider my leases long as they are for enternity.
     
  7. Michael Mitchell

    Michael Mitchell Property Manager Business Member

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    Not uncommon - I encourage longer leases because it's less wear & tear on the property from tenancy changeover and furniture removal etc, less down time, generally more stable and happier tenants, better for business both management and for the Owner.
     
  8. Scott No Mates

    Scott No Mates Well-Known Member

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    AFAIK an agent cannot prepare a lease longer than 3 years and it must be prepared by a solicitor (this applies to all commercial leases which is why the standard form lease is for a max of 3 years).
     
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  9. Michael Mitchell

    Michael Mitchell Property Manager Business Member

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    ^ Only for commercial, residential can be anything
     
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  10. D.T.

    D.T. Specialist Property Manager Business Member

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    Quite uncommon for initial lease - too many uncertainties to lock in for. Have done some 2 yr renewals though, where tenant is perfect, loves house, no doubts on landlord’s & tenant’s intentions, etc
     
  11. skater

    skater Well-Known Member

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    We've only done one long term lease of 3 yrs. The tenant was an existing tenant who treated the home like their own.
     
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  12. thesuperman

    thesuperman Well-Known Member

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    1. Wow 21 year minimum residential lease for 80% of your leases. How do you manage to tie in a residential tenant for that long? Are they 100% certain that they want to live in the property for more than a quarter of their life? Does the lease allow them to sublease the property if they decide they don't want to live there anymore and does it include rent increases as part of the lease?

    2. After how many years must a residential lease be registered on the title, or is this an optional thing?

    My question was more relating towards the initial term of a lease.
     
  13. Trainee

    Trainee Well-Known Member

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    Your question seems to be from someone who has never rented out a ip before. Why would a landlord trust a new resi tenant enough to offer 2 years? Usually six months to see how it goes.
     
  14. Beano

    Beano Well-Known Member

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    Live for the moment
    The link goes to a similar type of property but mine are perpetual not terminating
    If you are really interested pm me and I will send you a lease.
    A third of my rental income (commercial and residential ) is in long term tenants ie 12 to 21 yr leases
    1: I don't know the tenant was in the property when I purchased . ...I have enclosed a link to a similar property with a long lease perhaps you can talk to that landlord (the Catholic church) ps I am not a church/organisation just a mom and dad investor.
    The tenant can sell the leasehold interest
    Details are in the lease
    2: I would say all leases need to be registered
     
    Last edited: 19th Jan, 2020
  15. Kassy

    Kassy Well-Known Member

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    I have a property in a good school zone and am regularly asked for longer leases on that one as people want their children to get in and complete at the school. That’s for initial and renewals. I am not keen on more than a 1yr lease for an initial term as I like to know how the tenant is before I am stuck with them...