Selling to tenant

Discussion in 'The Buying & Selling Process' started by PFrankyX, 25th May, 2020.

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  1. PFrankyX

    PFrankyX Member

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    Hi, new to the forum and I've searched for an answer, but cannot find anything and I'm keen to get a bit of advice as I prepare my house for sale.

    I live in QLD, but we are looking at selling our IP in Sydney. Its currently tenanted on a 2 year fixed lease (exp Aug 2021) and we have flagged it by the tenants a few months ago if they'd be interested to which they replied 'possibly'.

    Firstly, if the tenants buy, without listing it for sale on the public market, am I committed to paying the real estate a commission? From the point of view that they introduced the tenant to me?

    Secondly, while understanding the difference between Exclusive / Sole agency agreements, but given that if the tenant does buy, it could be defined that they were introduced by the agent, if I do list it (Sole agreement) and the tenants then do decide to buy direct, what options do I have to save paying any commission?

    TIA
     
  2. Stoffo

    Stoffo Well-Known Member

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    Be aware that in NSW if you notify a tenant of your intent to list a property for sale they can vacate in as little as two weeks, regardless of what the lease says.
     
  3. Scott No Mates

    Scott No Mates Well-Known Member

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    What does the management agreement say?
     
  4. PFrankyX

    PFrankyX Member

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    Nothing that I can see
     
  5. just_some_guy_89

    just_some_guy_89 Member

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    I suspect it's probably unlikely that the tenancy management agreement contains a clause in it that gives them a right to a commission if the property is sold, but it is worth checking out. That said, in NSW an agent isn't actually allowed to claim a commission without written agency agreement - Section 55 Property and Stock Agent Act. If they tried to do so I think you could argue the point in respect of commission .
     
  6. PFrankyX

    PFrankyX Member

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    Wow, i didn't realise this. I have just seen on the Tenants' Union website
    Factsheet 09: You want to leave

    It states: Terminating due to extraordinary grounds during a fixed term
    In some situations, you can break your fixed term agreement without compensation to the landlord by giving a minimum 14-day termination notice. These situations include being offered a place in social housing or aged-care; if the landlord wants to sell the premises and did not tell you this before you started the tenancy, or if the premises are listed on the loose-filled asbestos register.

    This could be argued, but given that I have asked them if they want to buy, can this be argued that it's not 'extraordinary grounds'?
     
  7. Archaon

    Archaon Well-Known Member

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    You didnt have the intention to sell the property prior to signing the tenants on though did you?
     
  8. PFrankyX

    PFrankyX Member

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    No, to be clear, the contact with the tenant came after the lease began.

    I'll wait for the agent's advice on how to best proceed.

    If you were the tenant (and it is a positive relationship, although very little interaction), would you prefer to have the notice provided by the agent or the owner?