Tenanted Property Managed By Another Agent

Purpose

When receiving instructions to sell a property, that is managed by another agent, the following procedures must be observed in order to avoid potential and expensive litigation

Procedure

Vacant Possession

• Do not under any circumstances affirm to a prospective purchaser that vacant possession shall be given unless in a position to do so and ensure that the Contract Note or Contract reflects either vacant possession upon receipt of the whole of the purchase money or receipt of rents and profits.
• Contact the managing agent as a matter of courtesy advising them that we have received an unsolicited agency (make sure the authority is in writing first) to sell the subject property,        requesting a copy of the lease to verify when vacant possession to be given in accordance with the Residential Tenancies Act.
• After having observed the foregoing write to the tenant advising the vendors instructions to sell (cc a copy to the managing agent confirming inspection arrangements, chattels, rent reduction (if any) etc.
• Ensure that the stock sheet reflects the current tenancy arrangements and whether or not the tenant wishes to remain in possession.
• Note:  Responsibility for a Notice to Vacate must be initiated by the listing consultant prior to a signed Contract of Sale by either our property management department (as managing agent), the managing agent, or owner.

Subject to Existing Tenancy

Note that the Contract Note will state that the property is subject to existing tenancy and a copy of the lease must be included in the Section 32.

Selling Tenanted Properties

The Residential Tenancies Act was founded on two basic tenants that being security of tenure and peaceful enjoyment

The legislation also provides that a sixty (60) day Notice to Vacate (NTV) a tenanted property must be served either before the property is sold or within 14 days of the property being sold.

It must be noted that a tenant can’t be made to vacate prior to the lease expiring. The 60 Day notice must coincide with the lease expiry date or a date after the lease expiry date. A property can be sold while a tenant is on a lease but it must be sold with ‘rents & receipt’.

       If the tenant is not on a lease they can vacate the property at anytime giving 14 days notice.

       It must also be remembered that a tenanted property should not be sold with less than a ninety (90) day settlement period.  This is necessary to allow for: 

• The 60 day notice to vacate (63 days if posted)
• If the tenants do not vacate, a hearing at VCAT (normally within 14 days after the NTV expiry date; and
• Obtaining and executing by the police a warrant of possession (14 day period in which they must execute the warrant).

When a property has been listed for sale with vacant possession, the consultant must complete the issued NTV form and deliver it to the property for the relevant action to be carried out.

Finally a minimum of 24 hours written notice prior to inspections must be given to all tenanted properties.