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Buying subdividable land with fixed tenancy on existing house

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  • Buying subdividable land with fixed tenancy on existing house

    Hi all,

    Would like to seek advice as I'm planning to purchase a subdividable land that already has a house on it. The tenants are on a fixed tenancy. I have a couple of questions:

    1) Do i have to get the current tenants consent to subdivide the land and construct a new house next to the existing dwelling which the current tenants live in?

    2) Is it possible to shorten the fixed tenancy or terminate it after purchasing the property?

    Thanks for reading and any advice is appreciated!

  • #2
    You do not need the tenants permission to subdivide.

    Obviously a subdivision, with consequently building deliveries etc, are going to impact on the tenants life. If they entered into the tenancy because it came with a huge 1/4 acre section, which you are now going to subdivide off, then obviously the tenant is being disadvantaged, ie nowhere for the children to play any more as an example.

    You could negotiate with the tenant to drop the rent by perhaps $2-40/week, depending on the amount of disruption, once it starts.

    13B Variations and renewals of tenancy agreements
    (1)Every variation of a tenancy agreement, and every renewal of a tenancy agreement, shall be in writing and signed by both the landlord and the tenant.
    (2)The landlord shall, before the date on which the variation or renewal of the tenancy is to take effect, provide the tenant with a copy of the variation or renewal.

    13C Tenancy agreements not unenforceable on grounds not in writing
    Notwithstanding anything to the contrary in any other enactment, no tenancy agreement, or variation or renewal of a tenancy agreement, shall be unenforceable on the grounds that it is not in writing.

    24A Expiry of temporary rent reduction
    If the parties to a tenancy agree that, during a specified period or until the occurrence of a specified event, the tenant is entitled to pay a lower rent,—
    (a)the agreement is a variation of the tenancy agreement to which sections 13B and 13C apply; and
    (b)on the expiry of the period or the occurrence of the event, the rent payable before the variation is reinstated; and
    (c)that reinstatement does not constitute a rent increase.
    You could not offer anything and see if the tenants kicks up a fuss or not, stays or not.

    IMHO, you must advise the tenant that you intend to subdivide and that you will be having site surveyors, builders visiting the now empty land. How would you feel if you were a tenant and one day you suddenly looked out the window, and the landlord was escorting someone you didn't know onto your back section. Then a month or so later, excavators, trucks started arriving. It then becomes an unsafe, noisy environment for the tenant. I know I'd be annoyed deluxe!!

    You can soothe any ruffled feathers by advising that it could take months before permission comes through from the Council.

    You could visit your new tenants once purchase has been completed, just to introduce yourself. This initial visit will give them a vague outline on what you intend to do. Then get your lawyer to write to them advising what you intend to do, what you perceive the consequential impact to the tenant and their family will be, and a vague time frame that is subject to Council interference!!. If the tenant gets difficult later, at least you've followed up your visit in writing.

    The biggest thing in this situation is to communicate with the tenant but don't allow them to dictate what you intend to do. If they're not happy, they'll leave.
    Patience is a virtue.


    • #3
      you have to talk to the tenant before doing any changes/ work on the property / land.
      like driveways and services etc.

      the tenant is renting the property based on the original state, meaning the full land size as part of the tenancy. they also have the right for peaceful enjoyment of the property so you can't just go and start taking off the driveway, removing a garage and doing work that would affect that.

      what you can do, is offer the tenant an incentive for allowing you to do some work AND start getting the ball rolling with a land surveyor and council. this will most likely not interrupt the tenant enjoyment of the property.

      you will have to have this consent from the tenant on paper.
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      • #4
        I'm with Orkibi on this one. Surveying and subdividing sure, but building.....no.

        Having said that, buttering up the tenant will usualy solve problems....especially a rent reduction while work is on. Don't frame it in a way that implies they can say no....that just begs the no response. Frame it on the lines of "x" is happening, we need to address the subject of your rent while "x" happens, we propose a reduction of "y". That way it has the best chance of becoming a negotiation about compensation, not about permission to build.