Wanting to buy PPOR - want vacant possession but auction in 2 days?

Discussion in 'The Buying & Selling Process' started by lucidity, 16th Nov, 2020.

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  1. lucidity

    lucidity Well-Known Member

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    There's a couple properties I am interested in as a PPOR, however one of them is currently rented until March 2021. Due to some personal situations, if I'm not able to move in by early Jan, I will have to rent another place which is quite a hassle especially with moving considered. I'd prefer to avoid that.

    The real estate agent verbally said the tenants "they have other places to go" and "it would be easy to convince them to move"; but we know real estate agents.

    Normally, I would make an offer subject to vacant possession, but the place is going on auction on Wednesday. Are there any options available to me? Wait for it to be passed in, and make an offer subject to finance and vacant possession?
     
    lucidity, 16th Nov, 2020
    #1
  2. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Auction contract cant be subject to finance per se, but certainly Vacant possession can be pre agreed for you I expect

    Seek legal advice ?

    ta
    rolf
     
    Rolf Latham, 16th Nov, 2020
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  3. wylie

    wylie Moderator Staff Member

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    We sold an IP with an agreement from the lawyer tenant that in exchange for keeping the property tidy through the sales campaign and vacating the property prior to settlement, we didn't charge him rent for the final four weeks.

    We had this written up, signed by both parties.

    Perhaps the vendor won't go to this trouble for an auction where you may not be the buyer, but if you buy before auction, it would be worthwhile looking at.
     
    wylie, 16th Nov, 2020
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  4. meffn

    meffn Well-Known Member

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    Just because the contract says its tenanted doesnt mean the vendor won't sell with vacant possession. It's just an option for a buyer who wants a tenant. Sale of premise is one of the reasons an existing owner can terminate a tenancy agreement.

    Email the vendors solicitor (or even better ask your solicitor to) asking them to amend to contract to provide vacant possession for sale of the property. Wait for written confirmation (or rejection).
     
    meffn, 16th Nov, 2020
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  5. wylie

    wylie Moderator Staff Member

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    Sale of a premises is not a reason an existing owner can terminate a tenancy agreement.
     
    wylie, 16th Nov, 2020
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  6. meffn

    meffn Well-Known Member

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    It will vary state to state but here is the nsw legislation

     
    meffn, 16th Nov, 2020
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  7. lucidity

    lucidity Well-Known Member

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    Thanks all. Re the RTA, the law mentions the termination date may not be before the end of a fixed term; so that's really only applicable to month-to-month tenancies. Good to know it is not 90 days as usual however.

    I actually ended up contacting the tenant directly, who immediately mentioned he's looking for a rent reduction or will move elsewhere. I was able to tentatively negotiate a couple weeks rent free if he moves out by XYZ; so I feel comfortable enough to request it included as a clause.
     
    lucidity, 16th Nov, 2020
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  8. meffn

    meffn Well-Known Member

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    Oh, I missed the part that the lease was until march. A warning to sellers I guess that selling with a fixed term lease in place inconvinences or limits your buyers.

    If you ask for vacant possession, the seller needs to make it vacant at time of settlement. Not after. I would ask for extended settlement at 5 months or whatever it is to take you past settlement end date. But the seller might need the money quickly hence selling with a fixed term in place.

    So in this instance you might just have to accept that a lease is in place.
     
    meffn, 16th Nov, 2020
    #8