You just saved yourself a big headache of finding tenants. No need to spend money and time on advertising your property, running viewings, going through applications and doing credit checks. The tenants are settled in their home and hopefully paying rent on time.
The biggest disadvantage here, you’ve inherited the tenants and the tenancy agreement. And you may not be able to make any immediate changes.
Before you buy
Property purchase is already a very stressful process. Unfortunately, when tenants and existing agreements are in play, you need to ask extra questions to be completely informed.
- When did the current tenancy begin?
- Is the current tenancy fixed or periodic? (Read more about types of tenancy and what it means for you here
- Has the bond been lodged with Tenancy Services? How much was it?
- Have there been any problems with tenants? And do they normally pay on time?
- When does the rent due? How often is it paid? And how?
- Is the property furnished?
- What was the last rent increase?
- When was the last property inspection held?
Taking over the rental lease
If you’ve inherited the property, or haven’t asked the right questions prior to purchase, use the list of questions above to familiarise yourself with the current tenancy.
- The bond
Tenancy Services make it easy to transfer the bond lodged to your name. Just complete the change of landlord form and forward it to them.
- The tenancy agreement
The change of ownership, doesn’t effect tenant’s right to be there. If you haven’t purchased with vacant possession, both you and the tenant are bound by the terms of the existing agreement they previously signed. If you want to charge the terms - for instance forbid pets when they were allowed previously, that won't be enforced. You have to wait until you are able to legally give your tenants notice and sign a new agreement. If you purchased a fixed-term tenancy property neither you or your tenant can end the agreement early just because you don't like each other. Also, legally you need to give 90 days’ notice to end a periodic tenancy.
- The tenants
It’s always worth introducing yourself to your tenants. Ideally, you’d like to schedule a visit as soon as you have settled on the property. It’s important for the tenants to know the property has been sold, meet their new landlord, find out your full name, contact information (including your address), and to know where to transfer rent from now on.
To find more information on buying a rented property, visit Tenancy Services
The information contained in this article is exclusively for promotional purposes. It does not in any way constitute legal advice and should not be relied upon as the basis for any legal action or contractual dealings. The information is not, and does not attempt to be, a comprehensive account of the relevant law in New Zealand. If you require legal advice you should seek independent legal counsel. myRent.co.nz does not accept any liability that may arise from the use of this information.