In this article JOSEPH MCMAHON, the Founding Lawyer at By The Rules Conveyancing, explains what actions property investors can take when they’re selling a property and their tenants refuse to leave prior to settlement. 

We have all been tenants at one time in our life. It’s a balance between your rights and that of the landlord. What happens if you are buying a property and the tenants are proving difficult or just won’t move out? This can happen even when they have no lease.

Believe it or not this is a serious problem for many investment buyers, however it is even worse for a home buyer who is waiting to move in. The first step is to look at the contract. The contract is the document that governs the relationship between all parties and is your instruction sheet on what to do.

If the tenancy is declared within the contract then you have a problem. This is because you inherit the “bad tenant” As long as he was up to date prior to settlement there is no breach of warranty by the Seller as to the state of affairs. So you will need to engage the managing agent if there is one, to commence proceedings to end the tenancy if it has expired or have it brought up to date if they are behind or damaging the property.

It is also possible to engage a suitable law firm, noting that often these matters are drawn out and can thus become quite expensive in legal fees. That is why it is often best to use the managing agent (or appoint one if there is not one) They have the experience with the necessary Court Applications and or the correct procedure in the relevant Tribunal. Most often you will find your self in a non legal environment at a Tenancy Tribunal. In Queensland it is the Residential Tenancies Tribunal or RTA for short.

The government philosophy behind the tribunal structure is to ensure that each party can seek justice without the need for lawyers. The trouble is they often appear to be biased against a land lord as they are seen to have the advantage. Anyone who has been “held to ransom” by a bad tenant knows that this is not always the case.

Rest assured justice always wins out in the end. Stick with the experts such as the managing agent and work patiently through the system and in a few weeks you will have the matter sorted.

Some things to remember:

  • A tenant without a lease still has rights and it is necessary to ensure agreement is reached prior to entering into the contract regarding vacant possession or not
  • Just because a tenancy in a contract states that the tenancy ends on the day of settlement is no guarantee that the tenant will be gone. Tenants have holding over rights and you need to ensure your lawyer has this sorted prior to you signing
  • Not all tenants are bad and most will cooperate with you in accordance with their rights. If you need them to be flexible a good approach is for you to be flexible as well…it is a two way street when negotiating each other’s rights.

Want more information or need someone to discuss a legal property matter with? Call the team at  By The Rules Conveyancing on 1300 22 33 44. They are one of the most innovative and fastest growing legal service providers in the property space.

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Asset Protection What To Do When Your Tenants Won’t Leave?