When Will My Rent Income Start??

[Rohb]

Hi All,Haven't done this before. I just purchased a property and taking possession AUG 4.The house is currently tenanted and paying the former owner.IF IAm taking possession in AUG 4 Do I get the rent onwards that date??The property has two seperate dwelling on it one has a TENANCY AGREEMEN Fixed term (so they can't leave) but the other dwelling has no TENANCY AGREEMENT.IF I want to ask them to leave.How can I do it legally and nicely??

[Monid]

Oh boy, Rohb.

First the easy question, your rent starts on the 4th of August when you take possession. You will find as part of settlement whatever proption of the rent for that week has already been paid to the vendor will be paid to you.

Secondly, tsk tsk, most people around here reccomend purchasing with vacant possession to avoid this very issue, it makes it the vendor's problem not yours.

Obviously you need to get them to sign a tenancy agreement or get out. I believe that the RTA still applies to them (I presume they have at least a verbal contract with the vendor) so I'm guessing you give notice, and hope that either there is a bond, or they don't get annoyed and damage anything.

Hopefully some of the more experienced hands in terms of managing tennants will chime in shortly,

Good luck, and congrats on the purchase
David

[xris]

Hello Rohb,

Oh boy, Rohb.

This is an understatement if ever I heard one.

There is not much point in my saying that this should all have been sorted out a long time ago, which it should have been, so I'll move on and try to provide some solutions.

If you bought privately then caveat emptor never rang truer.

If you bought through an agent then s/he should have explained things to you if you showed the slightest sign of uncertainty. In any event, ring that agent now (or find an agent in that office that knows about rentals) and ask what you need to do.

Why didn't you get any advice from your lawyer?

You could also try ringing TS for advice.

For most people the first one often provides a steep learning curve. In your case it appears that curve may be steeper than usual.

Whatever happens, I hope it goes well.


xris

[Rohb]

Why didn't you get any advice from your lawyer?
xris

YES I will, we got documents to sign on Monday.THANKS Guys.Tell you the truth thats was the last thing on my mind.Things happens so fast in the last week and half working fulltime,were in the process of refinancing my Home and my other rental so we can buy this one.Were going give them notice and hopefully meet them on WED to get Direct Credit organised and get the other tenant to sign a Tenancy Argreement and see what happens then.Looks likely Iam stuck with them for the 6 month.

[spurner]

Is there something wrong with the tenants, or why are you so keen to get rid of them?!

Nearly every place I bought had multiple existing tenants in place. I always thought of it as an advantage as you get rent from day 1, and don't need to spend any more money on the place before re-letting it. I'd visit them on or near settlement date, give them a new a/p form, and get their details. The previous tenancy agreement is still valid, including any fixed-term tenancy.

I can see the advantages in vacant possession though, choosing your own tenants, getting them to sign your own agreement and paying the bond you want to receive.

[Glenn]

Hi All,Haven't done this before. I just ...

Doing the easy thing like everything is in place and you have lovely adorable tenants ready to pay you from day one is wonderful. However the greatest satisfaction and rewards in life is achieved by doing the hard stuff.
First you have to put behind you all thoughts of being really busy and not being able to cope. This is the rubbishy thoughts that loosers and employees have.
Second your's and the vendors lawyers should have arranged for apportionment of rents. Many investor vendors are selling because they are hopelessly out of their depth and have little or no records. Sit down with the two tenants and figure out where they think they are paid to and start from there. If you can collect some arrears owed to the past landlord that is a bonus for you. If they are in arrears for one person it is likely they will be for you also. Get a basic agreement from them about rent then put it in writing and get them to sign. If in arrears then immediately take them to the tribunal. This will give them a good start with their new landlord. Do not fall into the trap that you want them to see you as lovable. Leave the loving stuff to the wife.
Sort the bonds out (if they exist). There is a good chance the vendor has not lodged them. If they have been lodged send a copy of your sale and purchase agreement (to prove ownership) to the bond centre to get the bonds into your your name as landlord.
Re the one with a written agreement all you do is give them a note saying who you are, your address for service and contact address. (not a good idea to give out your home address if dealling with baddies), your phone number and bank account. The last thing you want to do is sign a new tenancy agreement. This is the way to loose the bond and the lease. Get them to sign a new bank authority form and YOU take this to their bank for them. They may think they are busy also and not do this.
Re the no agreement people. They are likely to be nice innocent people suffering at the hands of the fool who used to own the house. Present a tenancy agreement and write on it REPRODUCTION or something like that to indicate that there was a previous agreement but it was not in writing. If the agreement looks as if it is just starting from the date you take over you will not be able to get them to clean up or pay for repairs at the end of their tenancy and if there is a bond you will not be able to access it.
I just love sorting out these types of messy situations. One real good one I did, the owner/vendor had been arrested for a well published grissly murder and needless to say I did not bother to talk to him. The situation was almost identical to yours. Luckily for me the tenant was a decent type and I managed to get all of my clients money.I have another one similar this very weekend with occupants having no tenancy agreement. I recovered the situation there by moving the occupants to another property with a new tenancy agreement. What I aim for is a win win situation. Win for the tenant and win for me and the owner. Forget the vendor they are the loosers.

[Rohb]

First you have to put behind you all thoughts of being really busy and not being able to cope. This is the rubbishy thoughts that loosers and employees have..

Thanks Glen,Yes I really do need to get my mind set right and be more organise.I got a copy of the vendor's Tenancy Agreement and will contact the RA to organised the BOND transfer to me and findout what the arragements,the vendor's made to the other tenant.I'll get the other tenant to sign a Tenacy Agreement next week.I'll meet the tenant and gather as much info about them,hopefully they are OK.and decide,how long the lease will be.What simple stuff do you suggest I put in the Tenancy agreement??

[xris]

Hello rohb,

Something has just dawned on me.

Are you buying with vacant possession or with a tenancy in place?

If you are not sure what I mean, look on your copy of the S&P agreement you got when you bought this place. On the front page there is a heading called Tenancy in bold half way down. It will either have details of an existing tenancy, nothing, vacant possession, or something like 'refer to special clause...'

What does it say? I know this may be obvious, but in light of what you have said and done so far, the obvious may have been overlooked.

xris

[Rohb]

Hello rohb,
Something has just dawned on me.
Are you buying with vacant possession or with a tenancy in place?
xris

Iam buying the place with the tenant in it.But having second thought with the one without the the tenacy agreement but I shouln't panic yet as they could be a decent tenant like Glen said.I'll find out when I meet them next week and will get them to sign an Tenancy agreement.

[Glenn]

and will contact the RA to organised the BOND transfer to me and findout what the arragements,the vendor's made to the other tenant..What simple stuff do you suggest I put in the Tenancy agreement??

I don’t want to sound as if I know everything about your case. We and everyone else knows I know nothing about it. BUT I take it RA stands for Real Estate Agent. Now I am sure you think the RA is a good person who has been really helpful and so on. At this stage the RA is out of it. All RA's know that it is not a smart thing to have any other involvement post the contract going unconditional. Naturally a number will keep circling like a shark or carrion seeking bird to strike once they see blood again so they get two sales out of the same property.
You need to do your own investigations like ringing the bond centre to see if there is a bond. Often bad tenants (call that confused) will say they paid such and such a bond and at least two weeks or even more rent in advance.
If the bond centre says there is or is not a bond; that is the end of the story. You have it from the correct and only authority.
Now to answer the question about special clauses. I have seen lots of tenancy agreements passed onto me when properties have sold or I have taken over management of a property. I am not convinced lots of words and conditions on an agreement will change how people act. I do have a special addendum to the tenancy agreement I use for real nice properties detailing how many hooks per wall and so on. Generally though I just stick to the standard Tenancy Services one that you can down load off their site or buy off Whitcolls or who ever. On the special condition section I just specify the number of people, no dogs, no smoking inside. Anything else will not carry much weight in tribunal and will not save your bacon. The tenancy adjudicators tend to see complicated long agreements as some sort of power game by the landlord and treat / punish you accordingly. I am not a fan either on fixed term tenancies. I like the power to kick em out when the rubbish is piling up and the neighbours are screeming at me.
Like I said before and you have picked up on. You and the tenant are stuck in the little life raft together. You need to get on with your tenant and show some leadership. Keep your eye on the inside water level (rent and property condition) and the angle to the horizon. Tenants generally are the first to rock the boat and pull / spit the bung / dummy.
The captain pockets the money.

[Lizard]

You can give them 90 days notice - You don't have to wait 6 months. Best wishes.

[thomas8282]

Taking existing tenants on in a new property

With what we are discussing; we are finding many places we look at (for our second IP) ARE tenanted but at a weekly rate well under what we would want to charge (what we are recommended to charge) for example $180 instead of $220. We have no experience of getting them from low rent 1 to higher rent 2!
Are there (a) laws and (b) guidelines for this sort of thing eg...the law says +15%pa max??? At what level do people tend to move out?
Thx in advance

[revdev]

Thomas8282,

Warm welcome to the forum. You may want to check out this recent thread also:

http://www.propertytalk.com/forum/showthread.php?t=7399

Yes there are rules, try www.dbh.govt.nz . The law of supply and demand will ultimately decide whether you are trying to charge too much. If you are, you will soon be given notice by your tenants.

All the best

G

[Rohb]

You need to do your own investigations like ringing the bond centre to see if there is a bond. Often bad tenants (call that confused) will say they paid such and such a bond and at least two weeks or even more rent in advance.

Just like to update,all is well now I did what you suggested and called the bond office sure enough HE didn't lodge a bond and just kept it in his BANK.I went to my lawyer before the settlement and she looked into it.Apparently after the same day my lawyer called he has sent the BOND to the Center to get it processed.I just now recieved the Change of Landlord/Agent Form and will send next week.

Like I said before and you have picked up on. You and the tenant are stuck in the little life raft together. You need to get on with your tenant and show some leadership. Keep your eye on the inside water level (rent and property condition) and the angle to the horizon. Tenants generally are the first to rock the boat and pull / spit the bung / dummy.The captain pockets the money.

Roger that! I 'll leave those tenant as is till the end of the agreement.They all seem decent enough.I am yet to meet the other tenant that has no Tenancy Agreement,From What I can gather he has lived in that property for more than 2 years now and without any Tenacy Agreement from the previous owner.When I meet him hopefully I can get to sign some agreement... THANKS to everyone who post in here ROHB

[Glenn]

That is fantastic Rohb.
I can see you starting to get a firm grip on the oar.
Just a little observation about landlords and tenants.
If more landlords did the job fairly, honestly, and completely then it would be easier for the rest of us landlords to go about our business. One or two sloppy landlords can be like a cancer in our midst. New tenants arrive thinking that they have to fight for a tap to be fixed or that they can get away with paying the rent a week or two late. Stick to the knitting and you will get a good result. Mess it up (like it sounds as if your vendor has done) and you neither get your rent nor do you get nice reliable house proud tenants.