When purchasing a rental property should you keep the existing Tenant on? This is a really good question and often in our experience the answer can be yes so long as the right process is followed.
Regardless of whether you intend to retain the Tenant or not, ALWAYS ensure that vacant possession is stipulated on the S&P Agreement before going unconditional. (See more on this below). In addition to the benefits outlined below this also allows you to go unconditional without having to wait for all of the below checks to be completed. Worst case if the Tenant doesn’t check out, you will then simply have a vacant property that is all ready to be rented to its next Tenant.
|Always treat the process like you would if you had a vacant property and follow the below steps:
Purchase with Vacant Possession when Retaining the TenantPurchasing with vacant possession will enable you to set in place your own Tenancy Agreement with the existing Tenant and ensure that any terms of the previous agreement do not end up your problem. In the eyes of the Tenancy Tribunal if you do not purchase with vacant possession regardless of whether you get the Tenant to sign a new agreement, the original Tenancy Agreement will be the only agreement they will observe in a dispute.
Ensuring that the previous Owners Tenancy Agreement is properly wound up prior to you settling provides multiple benefits including:
If you are in the process of purchasing a new property and would like some free advice on whether to retain the existing Tenants or not, contact us now on (09) 476 3433.
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