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Buying a house with a Tenant on a lease

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#1 Waratah

Posted 25 August 2007 - 06:27 AM

If you buy a house that has a tenant on a lease that hasn't expired can you ask them to move out before the end of the lease?  I wasn't sure if you had to honour the lease agreement till the end.

#2 ullyoop

Posted 25 August 2007 - 07:01 AM

I am currently in this situation.  The owner's of the house are selling and the real estate agent told me that the new owner either has to let me stay til the end of the lease or else sort everything out for me etc etc.  Ie I shouldn't have to pay for anything extra as that is not what I am intending to do at this stage.

*luckily due to the owner wanting to sell, they've kept my rent the same!!!*

#3 jadeh

Posted 25 August 2007 - 09:02 AM

Yep tenant has to stay. The only time that the lease is irrelevant is if the house has been repossessed and its being sold by the bank. Of course thats the situation that us as tenants are in!

#4 michls

Posted 25 August 2007 - 11:06 PM

mmm does this vary state to state?

I know in Vic, unless the rules have changed recently, that if you buy a house and there are tenants in there then to bad for the tenants.
We bought our house with tenants in it and they had to move out at settlement (They were given the appropriate notice from the previous owners that the property was for sale).
My DH used to be a real estate agent and this was the case when he was selling.

Interesting to know as friends of ours are tenants and the house they are in has just been listed. Surely if I wanted to buy the house I do not have to keep tenants in it? I would presume that if there were costs involved for breaking the lease, these would be the problem of the previous owner since it is them breaking the lease, not the new owner???

#5 SeaPrincess

Posted 26 August 2007 - 12:11 PM

In WA, you can give the tenant 60 days notice of the lease termination with no specific reason (as opposed to an actual eviction notice).  We had this happen to us once many years ago!

ETA, we bought our current house (in the NT) while it was rented.  We were lucky because the property manager and the selling agent both worked in the same office so once our offer had been accepted, the property manager helped the tenants find a comparable house in the same area.  Realistically, if a tenant knows their house is on the market, I would think they'd be looking already.


Edited by bec284, 26 August 2007 - 12:13 PM.

#6 jadeh

Posted 26 August 2007 - 12:20 PM

I would look at the dept of fair trading or something, because I know in NSW you cant break a lease unless you pay for all expenses + compensation. Not really fair on the tenants considering that the lease is a legal document if when a house sold it nullified the lease.

#7 Guest_toppy_*

Posted 26 August 2007 - 12:24 PM

We bought in Wa with a tennant, our agreement was we had to let them finish out their lease.  I'm not sure if that's WA law or just what the owner decided.

They wanted to leave town though and we wanted in so we organised a date a few months later with no penalty for them leaving early and none for us finishing their lease.

#8 jadeh

Posted 26 August 2007 - 12:35 PM

Any lease can be ended as a mutual agreement. If the tenants want to leave, and you want them to leave, the lease isnt an issue.

#9 andyb

Posted 26 August 2007 - 12:40 PM

I'm in Qld and our lease gets transferred to the new owners at the same rent and conditions.  We cannot get kicked out.  (Has happened twice to us)

I think its very fair that the lease is honoured, when you buy the property you know that it is currently tenanted and when their lease expires.  You are not forced into buying that particular property.

#10 Waratah

Posted 26 August 2007 - 02:40 PM

Well the good news is that the place I am interested their lease has actually expired so it is now on a month to month basis so no problems then.

#11 Bigfatbum

Posted 26 August 2007 - 04:12 PM

unsure.gif Wow We are looking as well and quiet a few have tenants in them. I had thought since I wasnt the one taht entered into the contract it didnt matter - this is good news to know. Ill file this info for future reference.

#12 christie_greig

Posted 26 August 2007 - 04:17 PM

We just moved into this place in April and 2 months later the house was sold and the owners want to move in. I spoke to them and said if they let us out without penalty then we will move out before our lease expires (this was more for our benefit as its so hard to find a rental in june when u dont want to move in til october and we didnt want to be paying rent in two places so that we didnt get stuck). They told us to give them 2wks notice and it would all be fine. We found the perfect place just recently, got approved and will be moving out a month before the lease ends.

As far as im aware though, in QLD, the new owner CANT ask the tenants to leave, it is the tenants right to leave when their lease expires.

#13 Nephnie

Posted 26 August 2007 - 04:49 PM

When you put and offer in on the house, you put it in that it is subject to vacant possession if you want to move into it yourself.  Just be aware that settlement might be a bit longer than normal while the current landlord organises something with the tenant for them to move.

As for moving costs etc.  Well that's up to the current owner to organise with the tenants.  That's got nothing to do with you unless you accept the house with tenants in place.  

The tenants have got nothing to do with you as the prospective new landlord unless you accept to finish off their lease.  The other possibility is to agree to settlement a week after their lease finishes.  But... All depends on how much longer is to go on the lease...

Speak to the REA and don't forget to put your offer subject to vacant possession (If you're wanting to move in straight away.)


#14 Waratah

Posted 26 August 2007 - 05:35 PM

It is an Auction and the contract actually says subject to tenancies but as they are on month to month I suppose you just have to give the tenants notice once you own the property.

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