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Buying property with tenent

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  • Buying property with tenent

    We take posession of our property on the 30th July. The current long-term tenent is paying $170 we wanted $195, which is the same we get on another unit in the same block. When we did the contract we insisted on vacant posession, the tenent will be out 2-3 days before we get completion. The problem is the current tenent wants to stay on and pay the $195 (once it is agreed by WINZ). The problem is as we can't produce a rental agreement until we own the property.

    I therefore ask how others in this group have handled such a situation where there is this gap between contracts.

    Tenency services were not a great deal of help.

    Thanks
    Rob

  • #2
    Vacant possession doesn't necessarily have to mean vacant at possession though.

    You say that the existing tenants are now supposed to be moving out 2-3 days before you take possession?

    I would contact the vendor(or agent, solicitor,...whoever you are dealing with) and explain that there was a misunderstanding, and that you are happy for them to extend the tenants existing agreement to coincide with settlement.
    Then you simply sign the tenants up on your new agreement if they wish to stay. (If for some reason now they have changed their mind about the increase, then it doesn't matter as this is their last day on the old agreement anyway......but communication with everyone involved would've sorted this out already).

    That's how i'm reading it at this stage anyhow for what it's worth,.......any more info though?

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    • #3
      I'm not totally sure on this but I think you should have no problem at all. Although you do not own the property you can still be deemed a landlord and therefore sign a tenancy agreement. (Check definition of a landlord at the front of the RTA.) WINZ should therefore not make an issue of this, but what they do is up to them I suppose. Perhaps point this out to your tenant when he/she next visits WINZ.

      xris

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      • #4
        New agreements

        You could always take the approach of being conciliatory but a business person at the same time.

        If you are getting the deal through a REA use words to the effect of ....."I want to put up the rent, but because I'm not the landlord when I put in an offer on the property, I couldn't do this. I would dearly like the tenant to stay, but at a slightly higher rate. Is it possible for me to visit the tenant, OF COURSE, with the old LL's permission!, to negotiate an amicable tenancy agreement with the tenant??"

        I tried this with a recent purchase (same scenario as yours). The vendor was more than happy (ie didn't care) that i approached the tenants and arranged new tenancy agrements.

        Tenants were very happy that they weren't/didn't have to move and only for $x extra per week.

        Another way to ease the rent rise into the tenants psyche, is to say "The rent is going up by $14/week. That's only an extra $2 per night. Boy, what a bargain that is." When it's explained like that, you'd be amazed how accommodating the tenants can be.

        Good luck and keep us posted.
        Patience is a virtue.

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        • #5
          Halfway to paradise,.....have any of these suggestions been of any help?

          What are your thoughts/feedback?

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          • #6
            Check to see where you will stand with regards to bond. I had a similar problem when I took over a property. I was trying to sign up new tenants before settlement, and they were relying on WINZ to provide the bond. I seem to recall that WINZ wouldn't pay the bond until I owned it. It might not be an issue if you plan to transfer the bond across. It would just pay to think about the bond and determine where you stand...
            Lisa

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            • #7
              Originally posted by Glen View Post
              Halfway to paradise,.....have any of these suggestions been of any help?

              What are your thoughts/feedback?
              Yes all posts have been of help. I am going to speak to our solicitor. I do however think our solicitor, Estate Agent could all have been of more help earlier on rather than us having to chase it. It amazes me how little RE agents do in NZ for thier 4% comapared to the UK where they only get 1-1.5%.

              Thanks all
              Rob

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