Tenant not vacating property

Discussion in 'The Buying & Selling Process' started by Seb_W, 22nd Oct, 2020.

Join Australia's most dynamic and respected property investment community
  1. Seb_W

    Seb_W Active Member

    Joined:
    21st Nov, 2019
    Posts:
    42
    Location:
    Sydney
    If a tenant has not vacated a property (NSW) on settlement, and a Notice to Complete has been issued to the seller. If the contract is rescinded by the buyer is the full deposit refundable to the buyer?
     
    Last edited: 22nd Oct, 2020
  2. Trainee

    Trainee Well-Known Member

    Joined:
    24th May, 2017
    Posts:
    10,258
    Location:
    Australia
    Notice to complete would be to make the seller complete the contract.

    refunding the the deposit would mean cancelling the contract.

    cant have both.
     
  3. Seb_W

    Seb_W Active Member

    Joined:
    21st Nov, 2019
    Posts:
    42
    Location:
    Sydney
    Yes, question was in the context of the contract being cancelled by the buyer
     
  4. Stoffo

    Stoffo Well-Known Member

    Joined:
    14th Jul, 2016
    Posts:
    5,301
    Location:
    In the Tweed
    More context req'd

    So you have agreed to purchase a property with Vacant possession ?

    The day prior to settlement you arrange an inspection only to find the tenant still occupying ?

    So you have given notice to the Vendor to complete the contract (aka you are refusing to complete as the vacant possession part of the contract hasn't been complied with) !

    This isn't an automatic cause to rescind the contract, it is not the fault of the vendor that the tenant has failed to vacate as per notice, eviction steps and process takes time to be legally effective, so you may just have to wait....

    Unless both parties agree to cancel the contract.
     
    Seb_W likes this.
  5. Seb_W

    Seb_W Active Member

    Joined:
    21st Nov, 2019
    Posts:
    42
    Location:
    Sydney
    Yes, purchased as vacant possession. Tenant still occupying the property at settlement and after notice was issued
     
  6. skater

    skater Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    10,222
    Location:
    Sydney? Gold Coast?
    If it's vacant possession, you don't settle until the tenant moves out. Once you've settled with the tenant in place it becomes your problem.
     
    Stoffo likes this.
  7. Stoffo

    Stoffo Well-Known Member

    Joined:
    14th Jul, 2016
    Posts:
    5,301
    Location:
    In the Tweed
    So you haven't settled and have issued notice to complete to the vendor, was there a timeline discussed on this with a new settlement date ?

    Was there some error on the vendor's part as to why the tenant hadn't vacated, or are they a difficult tenant ?

    Is the purchase still a good deal, or is this your opportunity to bail out at no cost to buy something else ?

    If the tenant is being difficult I wouldn't settle with them in place either !
    If it is an error on the vendor's part then maybe (based on rental history checks).
    If the market has fallen and you can get a better deal elsewhere, then if the tenant isn't gone by the next settlement date I'd issue notice to cancel contract due to failure by the vendor to complete (with refund of all monies/deposit paid)....

    Let us know how this works out ;)
     
    Seb_W likes this.
  8. skater

    skater Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    10,222
    Location:
    Sydney? Gold Coast?
    I could be wrong, but I read this as he has settled and the tenant is still there. I'm a little confused.
     
  9. Trainee

    Trainee Well-Known Member

    Joined:
    24th May, 2017
    Posts:
    10,258
    Location:
    Australia
    The Notice to Complete is to make the seller settle under the terms of the contract. So the property hasn't settled yet.
     
    Seb_W likes this.
  10. Seb_W

    Seb_W Active Member

    Joined:
    21st Nov, 2019
    Posts:
    42
    Location:
    Sydney
    Let me be a little more clear! :)

    The property didnt settle as the tenant had not vacated the property. At the pre settlement inspection there appeared to be no effort at all to vacate the property. The vendor seems disorganised and wouldnt be surprised if they hadnt issued the notice to their tenant

    We have issued the Notice to Complete with a 2 week extension of settlement date. So just waiting for that period to elapse now

    Certainly not a tenant I was keen to retain given they were in arrears

    Ill will let you know how I go
     
    mitsui, Sheshop and Stoffo like this.