Question for PM's

Discussion in 'Property Management' started by Watson17, 6th Sep, 2017.

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  1. Watson17

    Watson17 Member

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    Hey guys,

    Was hoping some of the Property Manager's or anyone who may know can help me answer i question i have.

    I have recently purchased a property that will settle in Mid October. The place has a tenant in there with a contract that doesn't expire until Feb 15th 2018.
    What i wanted to know is there any ethical why to evict the tenant before that date? I knew the contract was in place before i purchased so my numbers are based on not moving into the place until Feb but it would save me some money if i could move in sooner.

    Does a change of owner mid rental agreement change anything in terms of the contract? As much as it would help me to move in sooner i also don't want to cause stress or grief to the tenant.
    Any advice on this scenario?

    Thanks in advance.
    Adam
     
  2. thatbum

    thatbum Well-Known Member

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    Yeah, get the tenant to agree to terminate their lease early. Usually involves incentivising them with a healthy cash payment.

    Otherwise a tenant is generally entitled to stay out their fixed term lease. I don't know what your sale contract looks like, but it probably has something saying you agreed to purchase the property subject to the existing lease.
     
    Tom Rivera likes this.
  3. Watson17

    Watson17 Member

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    Thanks for the response.

    The contract does have subject to existing lease.
    Was just wondering if this was common and if there was a way to do it.

    Would talking to the property manager and telling them i intend to move in after the contract and if the tenant wants to move our prior to the contract ending i wont charge them the break lease fee, is that something that can happen?
     
  4. thatbum

    thatbum Well-Known Member

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    Well otherwise you could have purchased it with vacant possession, but its too late now. Then the owner would have had to deal with getting rid of the tenant in time for settlement.

    Yes but why don't you just talk to the tenant directly? Then you can get a better sense of how motivated they are to stay or leave, and what it might take to change their mind.
     
    wylie likes this.
  5. Trainee

    Trainee Well-Known Member

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    Youve signed it so nothing you can do about that now.

    Sure you can ask the tenant but they dont have to agree. Would it really save you money? You lose on rent.
     
  6. Pumpkin

    Pumpkin Well-Known Member

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  7. D.T.

    D.T. Specialist Property Manager Business Member

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    No, only possible to do vacant possession if tenant is on periodic lease and ample notice given. He said it was a fixed term lease. Or maybe the rule varies per state?
    Yes it is. You can terminate by mutual agreement. Thinking from tenants point of view, why would they want to uproot and go? I think there'd need to be a sweetener in the deal - ie cover their moving costs might work, or maybe something on top as well.

    At the end of the day, you knew there was a contract in place when you bought. Needing to move isn't urgent.
     
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  8. thatbum

    thatbum Well-Known Member

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    Nah rules are the same across the board I'm pretty sure. I just meant in a scenario where the owner can somehow bribe the tenant out and can therefore offer to sell with vacant possession.
     
  9. D.T.

    D.T. Specialist Property Manager Business Member

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  10. Watson17

    Watson17 Member

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    Thanks for the replies guys, much appreciated.

    Was a 12 month fixed lease signed in Feb 17 which i knew when purchasing the property. I have no problems with them staying until the lease expires, it's there right. Was more just seeing if there was any options within a new owner taking over the property, but if not all good.

    I'll try and have a chat to them to give them forewarning that i'll be moving in come the end of the lease but the rest is up to them.
    Thanks again.
     
  11. Big Will

    Big Will Well-Known Member

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    I know of someone who purchased a property and the vendor gave 50k to the tenant AND the purchaser also gave 50k - 100k total.

    Everyone has their price...
     
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  12. Tom Rivera

    Tom Rivera Property Manager Business Member

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    WOW. I've never paid more than a couple of weeks rent and moving costs at the most... oh my god.
     
  13. Chivaun.Shortis

    Chivaun.Shortis Well-Known Member

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    That tenant would now b

    Wow that tenant will be having a good holiday or a Landlord themselves now if that king of compensation. Like Tom I have only ever seen and heard maybe 4 weeks rent and bond or removal costs
     
  14. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Introduce them to your negotiation team

    [​IMG]