Selling tenanted property

[GreenTreeFrog]

We have a property in Christchurch with tenants.

We would like to put this property on the market.

We have never sold a property before lest one with tenants.

What do we say to the tenants? I can't stand the feeling that I am leaving them in the lurch or selling from under them. I know this is business yada yada, I just want to break it to them as nicely and considerately as possible.

If a buyer wants them out, does that become something they deal with when they take possession or do we have to give the tenants notice to vacate?

If we have to give them notice to vacate, when do we do that?

It is 60 days notice to vacate here in Aus, what is the notice time to vacate in NZ?

How do we tactfully handle the fact that people will want to see through the property while the tenants are living there. They are very busy professional people so I imagine this could becoming quite annoying for them.

ANY advice AT ALL greatly appreciated!!

Thanks!!

[Dean@Massiveaction]

It's quite simple green, you are required by law to advise the tenants that you are selling and you can give them 42 days notice once you get an unconditional contract.

MAKE SURE that settlement is more than 42 days from unconditional if the buyers want vacant possession. If they are happy to keep existing tenants then they simply take the tenants over and stop being your responsibility after setlement

[nzfrazer]

Just 2 posts to go for the 6k post Dean...isn't that an all time PT record?

[Dean@Massiveaction]

I think Muppet is ahead of me. We used to be able to click on members and sort ourselves by posts, it was usually a toss up between us. Mind you he seeds news stuff everyday so that doesn't really count :-)

[Hawkeye77]

If the tenant has signed a fixed lease for say 6 months with the seller.
Is the purchaser of the house bound to keep them there for this period?
I was under the impression they were.

[Keys]

If the tenant has signed a fixed lease for say 6 months with the seller.
Is the purchaser of the house bound to keep them there for this period?
I was under the impression they were.

FTT goes with the sale except if it is a mortgagee sale. Under that situation the FTT reverts to a periodic.

[GreenTreeFrog]

Under what circumstances would a TT break a FTT if the only reason is that we want to sell?

It is not a mortgagee sale but we do need the funds.

[Dean@Massiveaction]

I can't think of any. They are 100% biased in favour of the tenants.

[NZGEMS]

Hi green, you may also be up for capital gains tax in Oz, I understand your country can still charge you the tax if you sell a property here in NZ. May be wrong though and sure if I am someone will quickly correct me, if you have a fixed Tenancy you may be best to wait till it has a shorter time to run 2-3 months you have to give 6 weeks notice anyway so a little longer shouldnt matter too much, and like has been suggested you may get a purchaser who wants the tenant.
Pain for the tenant yes, but that is what you get when renting, have you thought of asking the tenant if they want to purchase it, you never know they may well be interested if they are professional people.
good luck.

[ken9237]

Greentree frog. Tenants out

Unfortunately you are obliged to give the tenants notice if your buyer wants vacant possession. You should tell the tenant you are putting it on the market before you list it. You dont want them finding out from the agent when they knock on the door.

Your tenant has to receive 48 hours notice if the agent is bringing someone thru for inspection. Some tenants are obliging and will let them through earlier. Some tenants will attempt to sabotage the sale by telling prospective clients all the bad points they can think of just so the property will not sell.

You may well be able to find an investor to buy it who will happily keep the tenants on (providing they are good tenants) You give them notice when it is unconditional not before.
You could tell the agent you would like them to find an investor if possible but yes, it is a business and unless you wont the tenants ruling your investment you have to do it.

I am sure it is 42 days notice to the tenant, so be sure to tell the agent and allow 6 weeks between unconditonal and settlement. A real estate company doing rentals could confirm this 42 days.

We have a property in Christchurch with tenants.

We would like to put this property on the market.

We have never sold a property before lest one with tenants.

What do we say to the tenants? I can't stand the feeling that I am leaving them in the lurch or selling from under them. I know this is business yada yada, I just want to break it to them as nicely and considerately as possible.

If a buyer wants them out, does that become something they deal with when they take possession or do we have to give the tenants notice to vacate?

If we have to give them notice to vacate, when do we do that?

It is 60 days notice to vacate here in Aus, what is the notice time to vacate in NZ?

How do we tactfully handle the fact that people will want to see through the property while the tenants are living there. They are very busy professional people so I imagine this could becoming quite annoying for them.

ANY advice AT ALL greatly appreciated!!

Thanks!!

[Keys]

Unfortunately you are obliged to give the tenants notice if your buyer wants vacant possession. You should tell the tenant you are putting it on the market before you list it. You dont want them finding out from the agent when they knock on the door.

Your tenant has to receive 48 hours notice if the agent is bringing someone thru for inspection. Some tenants are obliging and will let them through earlier. Some tenants will attempt to sabotage the sale by telling prospective clients all the bad points they can think of just so the property will not sell.

You may well be able to find an investor to buy it who will happily keep the tenants on (providing they are good tenants) You give them notice when it is unconditional not before.
You could tell the agent you would like them to find an investor if possible but yes, it is a business and unless you wont the tenants ruling your investment you have to do it.

I am sure it is 42 days notice to the tenant, so be sure to tell the agent and allow 6 weeks between unconditonal and settlement. A real estate company doing rentals could confirm this 42 days.

Suggest you read the thread and the RTA.

Might be good for you. This is a FTT. For a sale, the tenant determines access, not the LL. 48 hours has nothing to do with it.

[SuperDad]

GreenTreeFrog,

Here is what I would do in your situation:

1. Tell the tenants that you are intending to put the house on the market. Tell them what their rights are on a FTT. Explain what their rights are with respect to viewings by potential purchasers if you list the property for sale.

2. Explain that for you it would be best to offer the house with vacant possession.

3. Tell them that if they agree to ending the tenancy with 42 days notice from unconditional date, and they are accomodating with respect to viewings, then you will give them $5,000 of the sales proceeds. (The figure needs to be big enough to entice them out of their home.)

$5,000 is a small amount if it allows you to sell a house you couldn't otherwise sell with vacant possession.

Paul.

[Keys]

GreenTreeFrog,

Here is what I would do in your situation:

1. Tell the tenants that you are intending to put the house on the market. Tell them what their rights are on a FTT. Explain what their rights are with respect to viewings by potential purchasers if you list the property for sale.

2. Explain that for you it would be best to offer the house with vacant possession.

3. Tell them that if they agree to ending the tenancy with 42 days notice from unconditional date, and they are accomodating with respect to viewings, then you will give them $5,000 of the sales proceeds. (The figure needs to be big enough to entice them out of their home.)

$5,000 is a small amount if it allows you to sell a house you couldn't otherwise sell with vacant possession.

Paul.

I do hate saying this though.

Worst case scenario. Educated, ruthless tenant.

The tenant accepts your $5,000, the house goes unconditional, vacant possession is arranged. The tenant then makes an application to the TT to have your "arranged" termination overturned. They have the right to do so. You're now seriously in the poo. You could be asked to pay the tenant much more than $5k to get out of the mire, or pay the purchaser penalties.

Paul's suggestion is workable. Just be aware that the tenant need not contract out of their rights (staying until November).

Depending upon how your finances are, you could make an application to the TT for termination under S66. At the TT you could make the offer. If accepted, the tenant has no legal recourse.

I do accept Pauls suggestion that the money comes out of the proceeds of the sale and therefore you don't pay up front.

I say this mearly because you need to know all possible consequences. This is one which I thought of. There may be more.

A difficult situation. Is your property managed? Have you discussed this with your PM?

[Cassandra]

48 hours notice is not required

(quote)Your tenant has to receive 48 hours notice if the agent is bringing someone thru for inspection. Some tenants are obliging and will let them through earlier. Some tenants will attempt to sabotage the sale by telling prospective clients all the bad points they can think of just so the property will not sell. (unquote)

Refer Section 48 RTA - (3) -showing prospective purchasers - no defined notice period required. Entry at reasonable times and cannot be witheld by the tenant with a reasonale excuse.

[GreenTreeFrog]

Thanks for all the replies, we are not selling now due to the tenancy issue.