Legal - stuck with below market rent

[Daimlerman]

Hopefully the experienced can help me, I've just purchased a block of 8 flats, some of the garages are rented out separately, the previous owner has rented one of these out to a mate for $25 dollars a week less that what the other garages are getting, the mate has paid 12 months in advance, until June '11. What if anything can I do to get him out or the rent up? There are no tenancy agreements for the rental garages. Any thoughts? Cheers

[spaceman]

Soooooo..... any deal that was in place was an unwritten one with the previous owner????...... sounds to me like you are free to just put up the rent or kick him out whichever you prefer.

Cheers
Spaceman

[GO DO IT]

No tenancy agreements! this leaves them wide open. We would suggest that you go and sign up tenancy agreements. What bonds have been lodged? what information on the tenancies did you receive? You really need to tidy this up, unbelievable really that the paperwork, as far as agreements are concerned are so neglected.

Look for a 'win-win' it will be there.

Regards

[Perry]

Since when was a TA needed
for renting a garage? Permission
to panic denied.
.

[Orkibi]

I would go and get a rental appraisal from a local and reputable Property manager - with this I would go to talk to the mate and advice that considering the appraisal and what other are paying his rent is not at market level.

Then I will advise him that considering there is no agreement in place you would like to increase the rent to market rent - and it is up to him if he want to stay or NOT. - also check him up and put this on paper. - or offer the garage to the tenant who rents an apartment there.

Now, if he paid for the rent in advance for 12 month and you didn't get reimburse by the vendor on settlements then He should go back to hist friend and ask for his money back.

NOT YOUR PROBLEM - IT IS A BUSINESS REMEMBER.

[CJ]

Then I will advise him that considering there is no agreement in place you would like to increase the rent to market rent - and it is up to him if he want to stay or NOT. - also check him up and put this on paper. - or offer the garage to the tenant who rents an apartment there.

It is not a residential tenancy so does not need to be in writing.

If you were aware of the verbal agreement before entering into the contract, I would say you are bound by the verbal contract. If you were not aware of the verbal contract, I would call bulls**t on them and say you are not accepting it and that the mate should talk to his mate to get a refund if he did in fact pay it upfront.

Then agree a position going forward. If you cant agree a position, just send him an invoice and advise that it will be locked if not paid within x days if not paid.

[Viking]

Yep if he is not living in it then its a commercial tenancy. No agreement then put one in front of him.

[NZOldFart]

It is not a residential tenancy so does not need to be in writing.

If you were aware of the verbal agreement before entering into the contract, I would say you are bound by the verbal contract. If you were not aware of the verbal contract, I would call bulls**t on them and say you are not accepting it and that the mate should talk to his mate to get a refund if he did in fact pay it upfront.

Then agree a position going forward. If you cant agree a position, just send him an invoice and advise that it will be locked if not paid within x days if not paid.

Yep - I pretty much agree with this sentiment. As we don't know the full details of the situation it's a bit hard to get a real handle on the situation. I'd suggest you get a bit of legal advice on the contract law situation.

If the guy had paid in advance then obviously I'd expect that the income from that would have been apportioned to you in the settlement statement from settlement date to June 2011. So you certainly couldn't argue that you weren't aware of it. As a layman it would seem to me that in that situation there would be a binding contract in force. If the rent from it wasn't apportioned to you - then you may be able to get somewhere. So the devil is in the detail and I suspect you should get some legal advice from your solicitor.

[Winston001]

Go to your solicitor and ask about indefeasibility of title. You own the land. No registered leases -> you can insist on vacant possession.

All very well in legal theory of course, but it does give you a strong starting point. The tenants argument is with the previous owner regarding the potential loss of tenancy.

There is a counter argument that having knowledge of the tenancy, you are deemed to have accepted it, but your description suggests some wriggle room.

[mortgage broker]

How much more money would you make by renting it at the market rate? If its less than a $1,000, then I would consider being nice to tenant and they might possibly stay on at market rent after June.