What Options Do I Have if The Landlord Wants The Place Back before The Fixed Term Contract Is over

nushydude on 21/04/2017 - 11:13
Last edited 21/04/2017 - 12:28

We have been renting an apartment since 2016 March. After the initial 1-year fixed term lease ended, we released it for another 1-year fixed term. We did that so that they won't increase the rental for another year. (We had an ulterior motive, and I have written it at the end)

Yesterday I got a call from the property manager asking if we could give it back in 6 months instead of the year. The owners want to sell it. To make it appealing to us, he said they were willing to rent it out to us an extra month at no charge. So, basically 7 months lease but we pay only 6 months.

Legally we can say 'No'. It's not as if we are preventing him from selling it, but he might not get the same attraction from buyers, especially people who want it for their PPOR can't buy it.

Here's what I can think of, whether they agree with them or not is another question.

  1. Stay there until the 1-year lease is over (basically, say that we cannot give it up) - and no compensation of course.

  2. Say that we will try our best to find a property to buy (not rent) within the original lease period, and move out as soon as possible. As for compensation, they have to give us some amount for each month we move earlier than the end of lease period.

  3. Say we should be given the chance to leave any time before the 6 months with 14 days notice, but they cannot kick us out before that. No idea about compensation? Is that term - ability to leave any time - the compensation? Or perhaps, 'they cannot kick us out before' is the compensation. But this doesn't really help with buying a property.

  4. The real estate agent can find us a similar place (to rent) within the 6 months, with a 1-year contract (it will total up to more than 12 months, but we will live), and reimburse us the expenses (bond in full, moving costs, cleaning and any utility setting up costs).

What other reasonable options do I have?

Edit:
I did not mention this before. We were planning to move to our own place near the end of the term. The reason we signed the 1-year lease was so that we don't have to move to another place before that. Moving to our own place within 6 months is difficult, but in 12 months is quite a possibility. If we cannot do it in 12 months, then that's something we have to live with ourselves. Besides, there was the chance that the landlord would keep it rolling after the fixed term, so we could have more time. But as it stands now, 12 months is the absolute maximum we are going to get.

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Comments

  • boomramada on 21/04/2017 - 11:30

    Take the deal, everyone is happy :)

    • nushydude on 21/04/2017 - 11:36

      I was almost OK with it until I read these two comments.

      https://www.ozbargain.com.au/node/290222#comment-4409983
      https://www.ozbargain.com.au/node/290222#comment-4412019

      We have two kids; one a 3-year-old and the other a 9-month-old. It's gonna be far worse for us than for those two families.

      This is the first place we have rented and we have not moved once.

      • boomramada on 21/04/2017 - 11:43
        +2

        True, but now you have six months to find a good place, and you get a bonus month of free rent.
        or if you say you can't then you get till end of the lease and still you have to find a new place (that if landlord not willing to extend for another 12 month). That is my point of view.

        edit:
        Why not talk to landlord instead of us and try to negotiate something even better for both parties?
        Extra time?

        • nushydude on 21/04/2017 - 12:12

          I didn't mention the ulterior motive behind getting the 1-year lease. I added it to the opening post.

        • nushydude on 21/04/2017 - 12:25
          +4

          @boomramada:

          That's your problem. We aren't doing anything illegal. And we are a family, with two kids. Not just a young couple where both of them working and able to afford a 600k house. Moving is not going to be easy, so we wanted this place to be the last place we rent.

        • ronnknee on 21/04/2017 - 12:37
          +3

          @nushydude:

          Not sure if that's really an ulterior motive.

        • nushydude on 21/04/2017 - 12:39

          @ronnknee:

          Yeah, probably not.

          But we kind of said that if they increase the rent, then we will move out. Honestly, that is a lie. We would have still stayed if they had increased the rent.

        • boomramada on 21/04/2017 - 13:07
          -5

          @nushydude:
          Dude, I didn't said you are breaking any laws did I?. First you start with the sympathy card, too hard to move, young kids etc and wanting our opinion.
          Then when we asking more questions, you try to open up to us with ulterior motive. Now who is dodgy ;)

          Just saying, why don't you honest with the landlord and come up with a better deal, I don't think they need to pay anything or they can kick you out because of a sale of a property.

      • Sweetnsour on 22/04/2017 - 12:55

        Second dude has way too much stuff. When u spend 12 hours for the removalist you either have too much stuff or you didn't prepare boxes prior to them arriving. See blogs that give you tips on saving money while moving.

        • CacheHunter on 24/04/2017 - 00:38

          It depends. Moving with young kids is really hard - I've done it a few times. You need:
          a) time while the 9 month old is asleep and the 3yo is safely entertained
          b) somewhere to safely stack packed boxes - practically, with toddlers and babies that usually means no more than 2 high if its an area that they might access. A packing box falling on a baby could kill or seriously injure them. On the plus size, empty bulk size nappy boxes make good free moving boxes.
          c) to figure out how to pack all of the stuff that needs to be kept out until the last minute - for toddlers/babies that's a lot of stuff. Disassembling cots, change tables, … all takes time.
          d) a plan in case moving day needs to fit around bub's sleep - this may mean keeping a room (or half the property) out of bounds for a couple of hours

          12 hours sounds like a lot, but depending how easy both places are to access - eg 3 flights of stairs in a tight stair well at each end, and how well they were able to prepare before the move, I can imagine how it might take 12 hours.

          Each time I've moved, I've paid for an extra removalist. It makes the whole process much faster, which is important when also trying to look after young children.

          Personally, I would do anything to avoid the extra move, even if they pay your costs, especially if you take into account the weekends wasted looking for a place to move into.

        • nushydude on 24/04/2017 - 07:10

          @newdad:

          Thanksnfor explaining the practical situation with kids.

          We don't have a lot of stuff with us honestly. We didn't buy anything more than the essentials for living. But it is still going to be difficult.

          As far as my options go, I think this is what I'm going to say.

          We cannot definitely say that we can leave before the 12 month lease is done. But we will try our best to find a place to "buy" before that. If we do, we can give 14 days notice and be allowed leave. You should still compensate us for leaving early (eg: some figure x number of remaining months in the lease).

          [This is a new one and might actually not work] We can offer to buy the apartment unit if the expected selling price is within our budget. I guess we can negotiate a good price in this situation? But the place is small (2BR) so this will be only for a few years (at most) and the building is pretty old as well.

          If these are no good, you can of course sell it while we occupy it and we will corporate with the inspections.

        • CacheHunter on 24/04/2017 - 08:03

          @nushydude: do you have the owners details? If so, contact them directly and find out if the owner is willing to sell. If you buy it directly of them, they would save the agent commission, which can be several tens of thousands of dollars depending on the price, competition among agents in the area etc.

        • nushydude on 24/04/2017 - 08:44

          @newdad:

          I don't know their details unfortunately.

  • bobbified on 21/04/2017 - 11:46

    If you don't forsee any issue in finding another place at the end of the 6 months, then why not take the deal?

    You can ask the same real estate agent if they've got any similar places to rent afterwards and they may be happy to give you preference when looking at applications.

  • HardQuiz on 21/04/2017 - 11:56
    +2

    You should be reimbursed any moving fees in cash. Don't live rent free, ask for a $$$ amount.

  • Foxtail on 21/04/2017 - 12:13
    +1

    They need to pay or credit you what is called key money, 6 months early termination is by negotiation, your in the box seat but anywhere between 1 months free rent to $3K. I gave a tenant 1 months free rent and $1K for moving costs and they still had 6 months on the lease.

  • oscargamer on 21/04/2017 - 12:28
    +1

    do whatever suits you

    personally, i would refuse and simply move into your place when you are ready

    a months rent is nothing when compared to moving costs/hassle etc….IMO

  • weezlebub on 21/04/2017 - 12:34
    +1

    If they sell while you're living there, you have to allow them to inspect twice per week and new owner can kick you out very easily (i.e. at end of 30 day settlement)

    If you can move into your own place (at a stretch) in the 7 months, then aim for that - but ask for 2 months free (pay for 5, get 7)

    • nushydude on 21/04/2017 - 12:37
      +2

      The new owner cannot kick us out since we are on a fixed-term contract. The contract will continue until the term is finished. Then he can decide to not continue it, giving correct notice.

      Yes, the inspections can be a hassle I know.

      So, OK, two months rent then. Let's hear more ideas.

      • weezlebub on 24/04/2017 - 14:29

        Might be different, but in South Australia, on sale of property, your previous contract can either be continued, or they can kick you out (the 30 day settlement period would be considered your notice period if they advise you that they want to move in) …

        Your contract is with the previous owner, not with a new owner, just something to be aware of

  • Pumpkin_rrr on 21/04/2017 - 12:58
    +2

    Speed-reading…. I assume you have signed a new lease and it's finishing in March-2018, correct? And after that, you'd be moving to your new home?
    If I was you, with young family, two kids, I will not entertain the thought to move house twice in 6 months. I dont think any amount of money will make me do this. Well, unless it is a HUGE amount. They have signed the Lease, and they must honour it.
    You can offer to be cooperative with Open Homes, inspections (within reasons) and if they are nice people, they should compensate you for the "inconvenience". You can stay home during the inspections if you want to.
    Some Buyers might be happy with Tenants in place.

    • nushydude on 21/04/2017 - 16:28
      +2

      You speed read well. :)

      Good advice there.

    • Ihhdle on 22/04/2017 - 11:33

      This is what we did. We stayed in the house while it was being sold, with an agreed number of home opens. There was the hassle of people wanting to view the house again after the home open, but we just stayed at home and didn't clean it up to house inspection level. There was no question that the new owners had to honour our lease. They told us they would want the house at the end of the lease period. However, as it transpired, we moved onto a periodic lease and stayed in the house for a few years longer.

  • HeWhoKnows on 22/04/2017 - 12:33

    I think you will find that they can give you notice to leave if the property is sold, regardless of the fixed term lease. So pull your horns in and take what they give you with a huge THANK YOU!
    Furthermore, if an investor buys the property (highly likely in this market) you probably don't have to leave and have got a months free rent.

    PS For all OPs please always mention the state as laws differ from one state to another

    • nushydude on 22/04/2017 - 18:39
      +1

      I'm in VIC. They cannot kick us out unless both parties agree to terminate the contract early.

      But the landlord is asking us to leave before selling it. I have asked the agent why he wouldn't want to sell it with us being there. I'm yet to hear from the agent.

    • Deridas on 23/04/2017 - 21:05

      I'm pretty sure if you sign a 12mth lease agreement and the landlord sells the house, the buyer inherits the contract and cannot terminate it without the specified penalties.

      • nushydude on 23/04/2017 - 21:06

        That's accurate per my knowledge as well.

  • Nitro on 22/04/2017 - 16:18

    When I sold my rental property, I gave the tenants $500 for moving plus 1 month free rent. Everyone seemed pretty happy with that - I know I was, and the tenants never asked for anything more. From memory I think they had about 2 months notice. (and about 6-8 months left on contract).

    • nushydude on 26/04/2017 - 08:45

      Why did you feel you had to get the tenants to vacate the premises before selling? Did you feel that you might get better offers when there was no lease intact?

      Was this a house? If so, would your attitude be different if it was an apartment unit? I feel apartment units are more attractive as rental IPs than PPORs, so having an ongoing lease could actually be a good thing for the potential buyer.

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