The real estate market has been anything but cooling down…..
As a property management company, we often represent the buyer to take over the management of the investment property on or after the settlement date. Just as often, we also represent the vendor client and the landlord to handover the management to the buyer or the buyer’s agent and or property management company. Below are just some examples of the “drama” you can come across during this “settlement period”. Let’s take a closer look.
A Buyer’s Story
Buyers often decide to take over existing tenancy with them after settlement of the purchase. In this particular case, a final inspection was done before settlement, and the following issues were identified:
(1) Rubbish under the house – tenants say it was there before they moved in
(2) As a tenanted property there is no insulation at all which is an immediate breach of the tenancy act
(3) The blinds are not adjustable and broken
(4) The rear door glass is largely damaged, and the house is not “Secure” because of it.
Our landlord client who was buying the property wanted to avoid drama and just settle as it is. Although (2) is controversial and arguably not a settlement issue, the buyer in this case needs to understand that if the house has no insulation it is something that needs to be rectified. Items (1)(3) and (4) need to be addressed by the vendor before settlement.
Through negotiation, the vendor agreed to deduct $2,000 for settlement.
A vendor’s Story
The property was sold as vacant possession, and the purchaser bought it unconditionally at the auction. Final inspection was done a few days before settlement. The purchaser wrote a 2 page list of items that needed to be “repaired or compensated” through their lawyer, and one of those items on the list is “the alarm has no alarm code”.
Although the alarm is not on the chattel list of the sales and purchase agreement, it must be provided to the buyer before settlement, just like the keys which represent the access to the property. The buyer however was asking for an exorbitant compensation of $2,000 dollars for this item alone!
Our property manager was called to help even though the property was empty without tenants. He solved the problem on the day but only cost our landlord client $587. He helped our seller and landlord to complete the settlement successfully.
Getting the right legal advice is extremely important, especially for tricky and urgent settlement situations.
When buying and selling investment properties, especially when you buy and sell with existing tenants in place, please make sure that you use your best free resource- your property manager! We can really help you when no one else can!
When buying a property:
- Remind you whether the Healthy Home Standards are met
- Help to do a final inspection to save your money, communicate what the seller needs to do before settlement
- After settlement, contact the former landlord’s property manager to sort out the tenant takeover.
When selling a property:
- Give the tenants correct written notices to cooperate with the landlord for listing on market or for settlement on vacant possession;
- Help the selling agent with current tenants to access the property for open homes and private viewings;
- Reduce legal fee by providing timely assistance to solve urgent problems on the day of settlement
- Prepare all documents for the new landlord or new landlord’s property manager on time.
Where to find such a helpful property management company?
Check out UNO Property!
Our dream team has received a lot of positive feedback from both landlords and tenants.
Google Review: Total 107 reviews; Overall score 4.7
Facebook comments all 5 stars
High NPS Mark (Net recommended value for user experience metrics)