Purchasing a Property at Auction with Tenants (periodic lease)

Discussion in 'Property Management' started by act3548, 4th Apr, 2021.

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  1. act3548

    act3548 Member

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    Hi All,

    We are looking at a property going for auction on 17/04/2021, property is leased periodically (fixed-term lease expired on 17/04/2020). If we manage to purchase the property we would like the vacant possession. I have the following questions.

    - If a property is purchased at auction, is it possible to add any condition such as vacant possession at the time of settlement? My understanding of talking to the REA is that the buyer will have possession with the tenant and give a 30 days notice to vacate. We are concerned, what if the tenant does not leave and potentially difficult to evict due to the COVID situation.

    - If the property is passed in and the vendor accepts our offer post-auction, My understanding is we would be in a position to request for "vacant possession at settlement" condition to the contract. Is this correct?
     
    act3548, 4th Apr, 2021
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  2. Trainee

    Trainee Well-Known Member

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    You had a lawyer review the contract? What do they say about this?
     
    Trainee, 4th Apr, 2021
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  3. act3548

    act3548 Member

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    No, I haven't engaged a lawyer to review. You reckon this is something we should do before auction. Can one request for special condition i.e vacant possession for a property sold as auction?
     
    act3548, 4th Apr, 2021
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  4. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    You will if you want anything changed in the contract - such as vacant possession. Otherwise if you win the auction you accept whatever is in the contract.
     
    Terry_w, 4th Apr, 2021
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  5. Trainee

    Trainee Well-Known Member

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    then how do you know what you are agreeing to?
     
    Trainee, 4th Apr, 2021
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  6. wylie

    wylie Moderator Staff Member

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    My parents bought a main residence via auction about 18 years ago. They negotiated verbally with the agent, who confirmed a slightly longer settlement and lower deposit would be accepted. This agent is one my mother used to work with, so we knew the conditions had been accepted by the vendors.

    On the morning of the auction, my mother confirmed the conditions under which they wished to bid. There was some hesitancy about it. This was an "in rooms" auction so the agent wasn't dealing with just one auction. The agent hesitating was not the local agent but someone from the head office (from memory).

    It did get sorted out once the selling agent was found to confirm the contract conditions agreed to would be changed on the contract should my parents win, but I'd suggest if you do arrange any changes, get them in writing. Most auctions that long ago were on site, single auction, everyone involved present and able to confirm the changes easily.
     
    wylie, 5th Apr, 2021
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  7. act3548

    act3548 Member

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    Spoke to a solicitor, she said change such as vacant possession is a big change and it is unlikely the seller would change the contract, especially for the auction property. The advice was to check with the agent and get something in writing in an email prior to the auction.
     
    act3548, 6th Apr, 2021
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  8. JoannaK

    JoannaK Well-Known Member

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    You should get the contract reviewed by your own solicitor before the auction date. You write to the agent or your solicitor writes to the vendor's solicitor and request amendments to the contract in the event you are the successful purchaser. They will either say yes or no. If they say yes (and what you're asking for is not a big deal so it shouldn't be an issue), take that written confirmation with you to the auction so that if you are the successful purchaser those changes to the contract can be made before you sign the contract.
     
    JoannaK, 11th Apr, 2021
    #8