Change of Tenants

[newbieinvest]

Hi

I'm in the process of selling a property, which the buyers have decided to drag out. In the process, one of the tenants has decided that he has the right to place someone else in the property. I've found out he shifted out a month ago, and placed his friend in there, while he was paying the rent (don't ask me what the situation between them is?)

Now it's come to the point of her paying the rent - what do I need to do. Do I need to file a change of tenant form to the department of housing, or can I simply give her the rent bank account to deposit the rent into? Regarding bond, I think the new tenant may have paid the old tenant? Considering this property settles next week, is there any point in my taking any action, or do I need to to show the paper trail of who's living there?

Thanks!

[Cassandra]

Hi Newbie. Does your tenancy agreement prohibit sub-letting? (It is wise to have this clause) If so, your tenant has breached your tenancy agreement.

That aside, I would take the view that the original tenant is still your tenant with all due tenant responsibilities until he gives notice to terminate his tenancy.

Settlement is a week away? Is it with vacant possession?
If there is really only one week to go until settlement i wouldn’t bother with change of tenant formalities. Regardles of whatever arrangementd the two of them have made outside of your tenancy agreement, the bond held by the bond centre will be in the name of YOUR tenant and it is his responsibility to ensure that the property is vacated in good order with all rent paid- he obviously trusts his “friend” enough to bear the full consequences of her occupancy ;-)

[newbieinvest]

Hi Cassandra,

Yeah it does prohibit sub-letting, but the tenant has always been a really good tenant for the past 5 years, so I'm going to overlook his part.

The property was sold with tenants there as an investment property, so yes they are expecting tenants. I was just wondering if I need to get the paperwork sorted to show the change of tenancy, or leave this up to the new owners?

His 'friend' is part of some love triangle, I think maybe his baby's mother who now is living there with her new boyfriend, who also happens to be a police officer! Interesting characters!

[Cassandra]

Hi again Newbie

Yeah, its not easy to fathom the morals of a police officer ;-)

The new owners will have to submit a Change of landlord/agent form for the bond and should write up a new T A under thier name/s when they have title, so it would be best to be all tidied up by them at settlement.

Conveyancing Lawyers have probably requested a copy of the existing T A from you (?) so they will be aware of the existing named tenant that you have. As new LL's it is thier discretion to write up the new TA with a new tenant name, or accept a notice to terminate the tenancy from the previous tenant, or any one of the tenant parties, and then choose to advertise the property to -let.

In case your lawyer overlooks it, you could be proactive by downloading Change of LL form from the Dept of Building and housing website and sign your section as the previous LL relinquishing your name from the bond held after settlement date. Maybe pass on the Change of Tenant form too offering explanation that you believe the tenants maybe wanting to make the change. Notices of the property being sold and a letter of "disposal of LL interest in the porperty" should go out to the tenants after settlment - to inform them that you are no longer thier LL and a new LL or agent will be contacting them

[WGN ex-property manager]

Make it clear in writing to the old "Real" tenant that they are still liable to you for any late rent and any damage. Any arrangement the old tenant and new tenant may or may not have between them is not your problem. Make it clear to the new tenant that any bond refund will be to the old tenant (minus any damage or missing rent) and that any arrange ment they may or may not have had between them is not your problem.

If you weren't selling the house so soon I would strongly argue to get in writing from the old tenant that his tenancy with you has ceased on date <X>, and get the new tenants to sign a brand new TA and pay bond. (and any arrangement between the old tenant and the new tenant is not you problem).

Is the sale "Vacant possesion". If so, then make sure that the old tenant has been given 42 days notice in writing, and make sure the new "tenant" knows that they have to leave, that they are not a legal tenant but a "guest" of your "real" tenant, and that any arrangement between them is not you problem.

If its not a vacant possession them the status of the tenancy is not really your problem, the new owners inherit what they inherit - its their due diligence and their purchase. It would be polite to tidy up the tenancy, so the current occupants are the legal tenants, with a TA and bond with their name on it, but you don't have any legal obligation to.