Subject to lease

Discussion in 'Legal Issues' started by Katus, 26th Feb, 2020.

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  1. Katus

    Katus New Member

    Joined:
    26th Feb, 2020
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    Location:
    Victoria
    Hi All,

    seeking some guidance.
    I have settlement Friday and we have been advised the current tenant won’t be forced out from the property.
    when I signed the Contract of Sale on 28/11/19, it was subject to the following
    “At settlement the purchaser is entitled to vacant possession of the property unless the box is checked, in which case the property is sold subject to... and there are three options.
    the box was checked and the option which was check was
    “A residential tenancy for a fixed term ending 15 October 2019”.

    So, I have understood this to essentially mean the current tenancy agreement is void/ month to month until settlement and I become the new owner as this agreement has lapsed since October and I signed in November.
    I also allowed for a three Month settlement to enable the tenant adequate time to find a new rental.

    I am now being told they do not have to move out because they cannot locate a property and this clause.
    The tenant is currently under a HERS(?) scheme and supposedly there are no properties in all of victoria for her.

    I am expected to cover my current rental costs (1800 per month) plus and additional $1000 per month that her rent does not cover if she is not out of the property as of Friday.

    The COS was checked over by a conveyancer who knew this was a owner occupied property.

    questions are

    Legally is she allowed to stay?
    Is this an error/oversight on the conveyancers behalf?
    What should I do!?

    Thanks heaps!
     
  2. Katus

    Katus New Member

    Joined:
    26th Feb, 2020
    Posts:
    2
    Location:
    Victoria
    Hi All,

    seeking some guidance.
    I have settlement Friday and we have been advised the current tenant won’t be forced out from the property.
    when I signed the Contract of Sale on 28/11/19, it was subject to the following
    “At settlement the purchaser is entitled to vacant possession of the property unless the box is checked, in which case the property is sold subject to... and there are three options.
    the box was checked and the option which was check was
    “A residential tenancy for a fixed term ending 15 October 2019”.

    So, I have understood this to essentially mean the current tenancy agreement is void/ month to month until settlement and I become the new owner as this agreement has lapsed since October and I signed in November.
    I also allowed for a three Month settlement to enable the tenant adequate time to find a new rental.

    I am now being told they do not have to move out because they cannot locate a property and this clause.
    The tenant is currently under a HERS(?) scheme and supposedly there are no properties in all of victoria for her.

    I am expected to cover my current rental costs (1800 per month) plus and additional $1000 per month that her rent does not cover if she is not out of the property as of Friday.

    The COS was checked over by a conveyancer who knew this was a owner occupied property.

    questions are

    Legally is she allowed to stay?
    Is this an error/oversight on the conveyancers behalf?
    What should I do!?

    Thanks heaps!
     
  3. Jess Peletier

    Jess Peletier Mortgages, Finance & Property Strategy Aust Wide Business Member

    Joined:
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    Location:
    Perth WA
    Find a property lawyer to help you - it's all about what's in the contract.

    Good luck :)
     
  4. thatbum

    thatbum Well-Known Member

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    Perth, WA
    1. Probably.
    2. No idea what conversations you had between the two of you.
    3. Get proper legal advice and make sure you ask the right questions.

    Seriously though, did you ask the right questions before signing the contract?
     
  5. Lil Skater

    Lil Skater Well-Known Member Business Member

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    Melbourne
    Was the tenant ever served a notice to vacate? If not, then you’d need to do the whole notice to vacate procedure. This should have been communicated between the conveyancers, sales agent, property manager etc.

    If it’s not communicated, therefore it is still subject to a periodic lease.

    Get legal advice from a solicitor today.
     
  6. Trainee

    Trainee Well-Known Member

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    did someone explain this to you? If so who was it?
     
  7. Scott No Mates

    Scott No Mates Well-Known Member

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    Follow @Lil Skater's advice but don't accept the property until you have received vacant possession as per the contract of sale.


    The agreement is not void, it's valid and the tenant is occupying on holdover.

    Confirm that the notice to vacate was served by the vendor or will be so that settlement can proceed for you to gain vacant possession.

    If notice is/was not served during settlement and you accept the tenant insitu then you will have to serve a no cause termination (which could then be argued that it was retaliatory and take even longer to remove the tenant.
     
  8. Propertunity

    Propertunity Exclusive Real Estate Buyers Agent Business Member

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    [​IMG]
     
  9. Paul@PFI

    [email protected] Tax Accounting + SMSF Business Plus Member

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    Seek legal advice. This indicates the very reason why a conveyancer provides false economy.
     
    Terry_w likes this.
  10. Archaon

    Archaon Well-Known Member

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    If the tenancy was ending then Vacant possesion should've been the box checked, im not sure, but yes, legal advice Should be sort immediately.

    When is settlement?
     
  11. Scott No Mates

    Scott No Mates Well-Known Member

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    New Town likes this.
  12. New Town

    New Town Well-Known Member

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    QLD & NSW
    The tenant appears to be in hold-over from the previous lease term, and hence has hold-over rights. As per Scott's advice the hold-over tenancy will require a formal termination in accordance with the clause from the previous lease. Check how or if the Home Equity Rental Services (HERS) affects the tenancy