Help with Prior Access!! Vendor being an Pain!!!

[Traff]

Hi Guys

Need your help on this one!!!

We've gone unconditional on a Home and Income which we asked for prior access to do renovations in the vacant house in the S&P. The vendor signed agreeing it but before it went unconditional the vendor wanted some insurance in place, we went unconditional anyway and the agreement was we get insurance for the renovations required satisfactory to the vendor. Our broker has taken all the necessary steps required in getting the insurance in place and the vendor is still refusing us access saying he's not 100% happy with the insurance. First of all has anybody had this happen to them and if so can they tell me what the outcome was.

Secondly we've asked for vacant possession as there is a tenant in the back house. The vendor should have given the tenant notice on the day we went unconditional, if he's given the tenant notice and we decide to settle early with the tenant still in place (say for about a week) is the tenant still required to leave under the notice the original vendor gave? or would we be stuck with this tenant and have to give them 90 days notice to leave? The vendor wanted to settle in the new tax year 7th April but has offered us early settlement of the 1st April with the existing tenant in place for a week. We don't mind bringing the settlement forward to the 28th March so that we can start renovations but only if the tenant goes when asked.

All advice would be appreciated!!

Many Thanks

Sharon

[essence]

The vendor is being a w*nker!!!

We've gone unconditional on a Home and Income which we asked for prior access to do renovations in the vacant house in the S&P. The vendor signed agreeing it but before it went unconditional the vendor wanted some insurance in place, we went unconditional anyway and the agreement was we get insurance for the renovations required satisfactory to the vendor. Our broker has taken all the necessary steps required in getting the insurance in place and the vendor is still refusing us access saying he's not 100% happy with the insurance. First of all has anybody had this happen to them and if so can they tell me what the outcome was.

The vendor is breaking his contract with you by not allowing access prior. If you have ceded to all his requirements (ie the insurance coverage that he required), then, IMHO, the vendor may need to pay you compensation for access not given, ie. you had tradespeople lined up and because he didn't allow access it's cost you money. Get your lawyer onto this immediately.

Secondly we've asked for vacant possession as there is a tenant in the back house.

If you've asked for vacant possession, the vendor MUST provide same on settlement date, otherwise you don't settle and it becomes the vendors problem to get rid of the tenant. Any delay in settlement is a penalty HE HAS TO PAY.

The vendor should have given the tenant notice on the day we went unconditional, if he's given the tenant notice and we decide to settle early with the tenant still in place (say for about a week) is the tenant still required to leave under the notice the original vendor gave? or would we be stuck with this tenant and have to give them 90 days notice to leave? The vendor wanted to settle in the new tax year 7th April but has offered us early settlement of the 1st April with the existing tenant in place for a week. We don't mind bringing the settlement forward to the 28th March so that we can start renovations but only if the tenant goes when asked.

Again, this is the vendor's problem. It really doesn't matter what the settlement date is if the vendor hasn't given the tenant notice. The LL/vendor is required BY LAW TO GIVE 42 DAYS NOTICE. If he doesn't do this on unconditional date, then the time doesn't start counting until he gives the tenants 42 days Notice in Writing. If that goes over the settlement date, STILL the vendors problem. YOU DO NOT SETTLE UNTIL YOU HAVE VACANT POSSESSION.

Cease and desist all action until the vendor meets his obligations.

1. Prior access for renovation - if not given, request compensation.
2. No vacant possession - don't settle until the property is empty.

Fairly easy really.

[Traff]

Hi Essence

We have already got our solicitor onto it. As far as we are concerned he is in breach of the contract but can he get away with it based on the wording 'insurance satisfactory to the vendor'. My insurance broker has been in touch with his insurance broker and has put the contract works insurance in place along with an amount of around $150k to $180k for any damage caused.
The vendor hasn't stipulated exactly what insurance he wants in place for the renovations to take place and he seems to be stalling on this which is now taking us closer to the settlement date which is around the 7th April.

The reason why i ask about the tenants is because the vendor wants to settle in the new tax so he can still claim his losses in this tax year. He requested this verbally - we are trying to find another angle, if we can't get compensation or prior access to the property. We are more than happy to settle now in this tax year as long as the tenant still has to go with the current termination in place according to the RTA which is why i asked the question. We have an email from the vendor saying he would settle with the tenant in place but in the new tax year, then how could he refuse settling with the tenant in place in this tax year!!! At least then we would be able to get on with the renovations straight away without the vendor hanging around and the termination still in place for the tenant to leave in a week?

Just knocking some thoughts about - but this guy is getting on my nerves.

Regards

Sharon

[essence]

Righto.

You can't have it both ways. Either you settle this tax year WITH the tenant and then you have to give the tenant 90 days notice to quit (or possibly a $ incentive?), don't forget the tenant still has to find a place to stay, which could take 3-6 weeks, OR you settle next tax year WITHOUT the tenant.

We are more than happy to settle now in this tax year as long as the tenant still has to go with the current termination in place according to the RTA

He may go in this tax year, so long as the 42 days notice expires in it. If not, sorry, he doesn't have to move until the 42nd day, whenever that may be.

Personally, I'd settle next year without the tenant, but that's just me.

Don't forget about Karma. It has a habit of coming back around. The vendor probably doesn't/won't realise that.

Good luck and let us know how you get on.

[Traff]

Hi Essence
I would rather settle in the next tax year with vacant possession but with my renovations going ahead now so the property is all up and ready to go for settlement day with new tenants waiting to move in - sounds easy eh!!! Karma what goes around comes around - been there done that firm believer in it - lets see what the solicitor can pull out of the bag.

You would think that the prior access clause is pretty simple especially when it states for 'renovations'. Another to put down to experience!!!.

Thanks for your comments Essence - much appreciated.

Regards


Sharon

[essence]

Another option..

I'm unclear if both the HOME and INCOME are empty. From your postings, I take it the INCOME is where the tenant is?? That leaves the HOME empty.

Why not get your lawyer to write an uncompromising letter along the lines of .... "We have met all the vendors requirements for prior access re insurance (stating what insurance you have in place). The vendor has given no valid indication of what is considered "insurance satisfactory to the vendor" and we have complied with this clause to the best of our abilities, therefore there is no legal reason why prior access should not be given. We will be at the property at XXXXX date expecting to have access. If this does not happen all costs incurred in relation to having all tradesmen on site, will be deducted off the purchase price".

See what sort of reaction you get to that!!!

Re the tenants. Just delay the settlement date until tenant has gone. It's another hassle you don't need.

If you have tenants ready to move in and they've already given notice in the property that they're in and settlement is delayed because the vendor hasn't given his tenants notice, then the cost of putting your tenants in accommodation (ie hotel) should (IMHO) be met by the vendor. He won't like that at all,, but that'll teach him for being a w*nker.

Keep focussed. If it's a good deal, a couple of weeks isn't going to make that much difference.

Don't get mad, get even.

[Austrokiwi]

AS I see it you need to be in the driving seat rather than the vendor As long as you play the vendors game then you will always be following............. Talk to your lawyer and have a letter sent saying that You will settle on the agreed date but your lawyer will be holding $40,000 back ( in the lawyers trust account) to cover the extra cost created by the vendor not letting you on the property........ Then the vendor has to prove he/she has acted in good faith rather than you. this could cover the failure to give notice to teh tennant

[Traff]

Hi Essence

The back house has the tenant in which doesn't need any work doing to it. The front house needs new kitchen, floors sanded, new carpet, new bathroom, new fencing etc. We have stated what renovations we need to do on the insurance paperwork - so its not that we are hiding anything. As far as i know the vendor has given the tenant notice but i'm not 100% sure. I spoke to my solicitor on Friday and he sent their solicitor a letter saying we would not be settling due to him breaching the contract and not specifying exactly what insurance it is that he requires us to take out. I'm sure we will see what response we get on Tuesday, but according to my broker there isn't anything else we in the regards of insurance can put in place. The vendor is worried that we are going to cause a fire etc and our insurance won't cover that - he's insurers are saying that they probably won't cover that either. This is the first time we have purchased a property with prior access so this is pretty new to us. Our renovation company also has public liability insurance in place incase of incidents like this. I suppose he should have questioned the extent of the renovations we were going to do instead of just signing the paperwork. Renovations does not exactly mean a bit of paint considering the condition of the place.

[xris]

Hello traff,

I'd thought I'd have my say on this one. I do so love seeing mountains made out of mole hills.

Essance,

The LL/vendor is required BY LAW TO GIVE 42 DAYS NOTICE.

I know of no such law. Please enlighten me.

...........

A lot will depend on the wording of clauses and what has been said between the lawyers, if anything. Until that is clear there is an element of conjecture and assumption here. I find the 42 dat notice issue most interesting.

It seems that the vendor may or may not be in breach of the prior access clause, depending on its interpretation. Tough on you because you will need to follow this through with a civil claim which you may lose anyway.

You cannot hold back funds on settlement so don't.

You may have contracted out of the vacant possession clause by agreeing to settle early with the current tenancy still in place. Tough on you again. The interesting part is whether the 42 day notice still stands or is now void (I need to check the RTA wording on this issue.) My initial suspiscion is that it is void, so you now have to give 90 days notice.

However, you do not know how the LL has dealt with the tenant or what agreement they have in place so at the moment you are guessing on a future event.

What has the insurance broker really got to do with this?

I am always amused when I see people meddling in matters that are none of their business and thus get their proverbial knickers in a twist while making things a lot worse for themselves as they run around squawking like headless chickens.

I suggest (from the start point that is now gone)

1. You feel annoyed that prior access is not given. Huff and puff at the vendor over this and possibly take civil action later after settlement - which you might lose.

2. Sit back and wait for vacant possession on settlement.

3. Under no circunstances discuss compromises and other alterations to the contract direct with the vendor.

4. Never, never and never try to do the vendors work for him. Ponder over what he is thinking if you want to and if you have nothing better to do but keep those thoughts tightly locked up in your head.

But, as you appear to have done none of this only time will tell what interesting story awaits us.

Hope this helps.

xris

[essence]

RTA - vacant possession

Here is the relevant section from the ResidentialTenancies Act with relation to vacant possession.

51 Termination by notice
(1) Subject to sections 52 and 53, the minimum period of notice
required to be given by a landlord to terminate a tenancy shall
be as follows:...

(c) where the landlord has agreed to sell the premises and is
required by that agreement to yield the premises to the
purchaser with vacant possession, 42 days

1. You feel annoyed that prior access is not given. Huff and puff at the vendor over this and possibly take civil action later after settlement - which you might lose.

Your viewpoint. I would certainly be withholding monies as he has not complied with the Agmt S&P, but that's just me. I agree to differ.

2. Sit back and wait for vacant possession on settlement.

Agree. If he hasn't given his tenant 42 days notice, vendors problem, not purchasers. Penalty interest and all that.

3. Under no circunstances discuss compromises and other alterations to the contract direct with the vendor.

Again agree.

4. Never, never and never try to do the vendors work for him. Ponder over what he is thinking if you want to and if you have nothing better to do but keep those thoughts tightly locked up in your head.

Agree.

Jeez, xris, something must be in the water. I'm nearly agreeing with you on every point!!!

[xris]

Hello essence,

Vendor has to give Traff vacant possession, (assuming she has not let him off that obligation.)

The vendor can do this in several ways, one of which is by giving 42 days notice to the current tenant. There is no law that says he has to do this, not as far as I know anyway. With respect, quoting part of the RTA does not tell me why he is obliged to do this BY LAW. I await enlightenment.

xris

[Traff]

Hi Xris

I was going to head the title 'Xris i need some advice please' looks like i didn't have to.

I just wanted to clarify the S&P does state vacant possession i was just merely asking IF the vendor has given the existing tenant notice and the vendor is offering to settle early with the tenant still in place (for a week) is the tenant still required to leave on that notice even if we have taken possession of the property. I'm not assuming anything at all!!

My insurance broker and the insurance company for the vendor were sorting out insurance to cover the renovations instead of having to keep going through the solicitor - this is what the solicitors suggested to save time - so i would say i disagree with you they are not meddling in things they don't know about otherwise why would they be insurance brokers.

Also i'm not huffing and puffing just thinking to myself the guy is a d**k!!! and yes it is a guy i'm not presuming on that one.

Also i've had no contact with the vendor and i don't wish to either, everything goes through my solicitor.

You didn't say whether this is something you've come across in your little world of experience Xris, I would have thought you would have had something more constructive to say.

Regards

Sharon

[k1w1]

I'm confused, xris. Are you saying the 42-day notice period is not written in law? That's contrary to every bit of advice I've ever received.

[Glen]

What I guess that xris is meaning, is that just because the vendor is obligated to the tenant, doesn't mean that he is so towards the purchaser in regards to a 42 day notice!

[xris]

I'm confused, xris. Are you saying the 42-day notice period is not written in law? That's contrary to every bit of advice I've ever received.

Hello kiwi,

Glen seems to have got it, and too an extent I know that essence knows that too. It was just the way he phrased it perhaps borne of a fossilised mindset.

The point is that the vendor is obliged to give traff vacant possession. That is all. What has the 42 days notice got to do with this obligation to traff? Nothing of course.

The vendor, once he has an unconditional contract with traff on the S&P, can then decide how to give traff vacant possession. He could ask the tenant to leave after a week and the tenant might agree and then vacate; he could murder the tenant and bury the body in the back yard; he could give the tenant 90 days notice if settlemnt is in four months; he could pay the tenant $1,000 to get out by Saturday; he could give 42 days notice to vacate; he could apply to the TT for vacant possession because the tenant has failed to comply with a notice to rectify; he could...

Get my drift?

The is no law that says the vendor has to give his tenant 42 days notice because the vendor has just gone unconditional on a sale.

xris