If you are in the market to buy a house or an apartment, you probably know that a feature of many contracts for property purchases is ‘vacant possession.’ Vacant possession means that the property is also free from any tenants.
Alternatively, the seller may disclose a tenancy in the sale contract.
If you buy a residential property that is already occupied, then you will be responsible for honouring the previous lease and its terms unless the tenants move out before you sign the deal.
One of the most critical steps in buying a home or unit that has tenants is to ensure that you have all the facts so that you understand the implications of your purchase. Here, your trusted conveyancers from Bickell & Mackenzie share some insights into purchasing a house or apartment with existing tenants:
How Do I Know If the Property I’m Considering Buying Has Existing Tenants?
In the real estate industry, the seller is obliged to inform the buyer about anything that could be a problem for the buyer. If there is an existing tenancy, the Seller must disclose this fact to the buyer.
The Seller may disclose a tenancy by including it in the contract or by telling the agent or conveyancer.
The agent or conveyancer will pass the information on to the buyer.
What Are the Advantages and Disadvantages of Purchasing a Property With Existing Tenants?
The Advantages:
- The apartment or house may be cheaper.
- The apartment or house may be in a better location.
- You won’t have to wait until you get a tenant and start earning from your investment property.
The Disadvantages
- If you want to change the property or renovate during the tenant’s lease, you’ll need their permission.
- The property may be in need of maintenance and repairs that the tenant has organised.
- You may not be able to occupy the property (if you want to) until the tenant’s lease ends.
What Should I Check When Making an Offer on a Property With Existing Tenants?
Check whether the tenant has a lease for the entire property or just a part of it. If it’s the latter, then try to get the tenant to leave. In any case, remember that a real estate agent or lawyer can assist with this step.
What Responsibilities Do I Inherit As the New Landlord?
You are responsible for the tenant’s lease from the day you sign the contract and take over the property. This includes rent payments and maintenance. If necessary, you may request some assistance from your real estate agent or lawyer.
Can I Choose to Have a Property Manager?
Yes, you have the right to choose a property manager. If you choose a property manager, you should check if they are a registered business. You can also ask them for their licence details.
The property manager is responsible for looking after the tenant and ensuring that they follow the tenancy agreement. They may manage the property, but they are not allowed to do any repairs or manage repairs on the property.
It is the landlord’s responsibility to ensure that the repairs are done and that the property is in a suitable condition for the tenant. It is also the landlord’s responsibility to collect the rent from the tenant.
Conclusion
If you want to buy a house or an apartment but are concerned about tenant issues, then you might want to consider purchasing a house without tenants. It’s essential that you know all the facts before you buy. Talk to local conveyancers to find out more about buying a house or apartment with existing tenants.
Bickell & Mackenzie is an established law firm within the Redlands area that specialises in conveyancing. Contact our firm today to schedule a meeting with our expert conveyancers.
