Hi we need a little advice. We own a property in Vic that we moved out of to come back to NSW to live. We are currently renting so this is still considered our primary residence (is that what it's called?). Anyway we had a hint from the Property Manager that the tennants in our IP might be interested in buying. They have asked how much ours or a property like it would cost.
So here is the dilema. We cannot afford to sell with a Real Estate Agent, however if we were to get a reasonable price privately we could perhaps handle the sale. So we thought we might contact the tennants and put it to them that the property might be for sale if they were interested. However my Dad used to be in RE and he said that if we did that the Real Estate Agency who manages the property would consider this to be their client and we would not be allowed to approach them as they see this as providing a customer to us and would then have to use them for the sale.
Can anyone tell me if this is right or not please? I have been warned that if we breached this the Real Estate Agency might sue us?
Any help would be greatly appreciated.
I guess you would need to take over the management of the property with the same tennants in place . You could ask them what they were looking to pay and if it is in the ball park you could and advise the tennants that the property is not for sale now but if you decided to sell in the future you would give them first option on the property. You would then need to wait a month or so before negotiating a sale with them. You do however risk loosing the tennants in the mean time as potential buyers. Alternatively ask them what they would pay for it now. It may be high enough to cover the sales costs. It will be interesting to see what other comments you receive from the forum.
All the best
ClaireI don't think that the tenant is the RE's client, you are ther RE's client you can fire the property manager at any stage and they will not take the tenant with them.
If you decide to sell your property to the tenant that is your business, you hired the RE as a property manger, not a sales agent.
If you wanted to add another layer of profit to the deal you could perhaps sell it under a wrap arrangement.
Have you signed a 'sale authority' at any stage with your managing agent?
Unless you have signed a 'sale authority' with the r/e agent that is still binding, or allows them to keep a commission if you sell to a buyer that they have introduced even after the sale authority has expired, then the tenants are not the managing r/e agents' client.
You can sell it to them and the agent can't touch you.
You will need to speak to a solicitor about forming a sale contract and doing the settlement for the sale.Wow everyone thanks for your advice. I will certainly check about the sale authority, all I am aware that we signed was a document to agree to manage the property.
I think we will take over mangement of the property anyway for now and then feel safer in approaching them. Although we are in different states we still have family not that far away from the property, and as it is a relatively new house there is not a lot of maintenance required. Also it is painful to get the money through regularly with the RE because if the tennants pay on the wrong day of the week or even half a day late the RE don't give us the money until the following week, and are charging us around $40/fortnight for this wonderful service.
Cheers
JanelleEven though you are going to manage it yourself, you are still bound by the Tenancy Act. Make sure you get a tenancy agreement set up to cover both parties.
Think hard about this option as the cost of a good manager is tax deductible – worth every cent.Hmmm thanks Marc, yes we were planning on getting a proper lease etc. if we take over the property management.
Do you think REIV would be able to clarify the matter of approaching the tennants while the R/E agents are property managers?
Janelle
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