Breaking a lease

[Hansie]

Hi All, I was wondering if any of you that have investment properties or been in this suitation could help with the legal side.

We are looking at a house to buy in Melbourne, but it is tenanted at present and the lease does not expire until September this year. We will be buying it as our home and will need to sell our unit in order to pay for the house. We need more room with another on the way. We do not want to take on the tenant and have asked that if we were to buy that we have settlement in September. The vendor's response to this is that he wants September money or it's a 30 days settlement (we take on the tenant). How much we don't know. But from section 32's they only bought the property in May 2009 and leased in September now selling in January 2010. We have been told that the tenant does not want to break the agreement as she is a single mum. Which is why we said that we would have a settlement in September being fair we would have our unit to live in and they would be keeping there agreement with the tenant.

My question is even though we don't want to and would much prefer the longer settlement money wise and accomodation wise (bubba 2 due in July) we can't afford to get a huge mortgage to cover that house and have it leased and run our unit for 8mths. How does it work with tenants and buying and selling? Can we break the lease by purchasing the property or legally does the tenant have the right to stay even if it's sold.

I would appreciate hearing both sides and thank you advance for your thoughts.

Hansie

[ss_storm]

I thought that if the house was sold it is yours to do what you like with...so you could ask the tenant to find somewhere else, as long as you gave them appropriate notice. I don't think the current owner can (or even should!) be telling you what you can/can't do about the tenant...once it isn't their house it isn't their problem..

JMO...can you have a chat to the real estate agent about it? Even if you don't mention the particular property it is, but just ask it as a general question.

[~clover~]

If the lease is current, as far as I know it can't be broken. It wasn't fair of the current owners to do this to the tenant!
We've lived in a few houses for sale. They are usually only available for a short term lease (3 - 6 months) if they are on the market, or going on the market. Our last place was sold strictly as an investment property so we could stay in the house as long as we liked.
The 2 houses we did have to move out of were when the lease was up & not before.

[Mother Goose]

Actually, you can. You can do it a couple of ways. You can have a condition put on the sale that it must be vacant on settlement. This means that the current owner has to serve a notice to vacate. OR you can have a 30 day settlement and then give the tennant a notice to vacate citing that you (as the owner) want to move in. The due notice is 60 days (from memory). You could contact the Real Estate Agent who looks after the lease and ask them to let the tennent know (if you're successful with the bidding) that you intend to move in and will give 60 days notice from the date of settlement. If settlement is 30 days, this gives her an extra 30 days to prepare. You could also tell the tennent that if she finds a place after the settlement date and wants to move out before the 60 days notice is up, that you won't charge her a break of lease fee (which is standard in contracts to stop the tennent from breaking lease). But stress that this is only if she moves AFTER settlement and before the 60 days notice expires because the current owner sounds as though he will chase for every penny he can.

The house I rent was recently sold and I researched it pretty thoroughly. There are ways for both parties to end the lease before it is due to expire. Also find out if she is on a SET lease or if it is month by month.

[Mummato2]

I was in this exact situation.

If the current owner wants the sale and the tenant is in lease, he can give them a notice to vacate the premise and that allows 60 days. This can be incorporated in the contract terms of the sale, or you can discuss it with him, get him to do it and have the contracts exchanged under vacant possession.

We did it by getting the current owners to give notice and we moved in a week later.

FWIW - no one in a fixed lease is "safe" from eviction. If you are out of lease, 30 days notice is given, if it's in lease it's 60 days.

Good luck!

[Amity]

Check with the Tenants Union of Victoria. (Google it).

They will tell you about the tenants' rights, which usually include helpful hints for landlords...