I’m looking at purchasing a property with a stand alone granny flat at the back of the property, it would be a good investment the only thing i’m worried about is the tenancy agreement. because as of right now i believe what is happening is the tenants are on the lease who live in the house but the stand alone granny flat is then rented out to their friends (with no tenancy agreement)
if i tried to get 2 tenancy agreements i think i would have problems because there are no fences or anything dividing the property and i would have to go through council to get it done and it could prove to be expensive.
having people living in the granny flat who are not on a tenancy agreement, how bad is this? because the tenants could just argue that their friends are just staying for a couple of nights.
Sounds like there’s a right way and a wrong way. The right way will take time/effort/costs but should be worth it in the long run. I’d always have a formal lease in place.
Thanks for the reply, I’m aware of a protected tenant. but being that their would be a tenancy agreement in place for the dwelling and the granny flat being on the same title. I’m just asking what type of problems you could have? with this type of situation?
worst case i see is that the tenants (who live in the property) move out and then the people live in the granny flat stay in which case that would be worst case scenario. but i would think you could then withhold the bond being that it was the tenants (who live in the property) responsibility to properly vacate the property?
The answer is fairly simple you document the Tenants on the purchase contract.
You give the Seller the option with your consent to sign a separate Tenancy with the Granny Flat and if they choose not to you insist that this vacant on settlement.
This way you can let to whoever you like.
Legally document everything and you can’t go too far wrong.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
I ouldn’t want people in there without a tenancy agreement. Even though it’s sublet everyone should be on the agreement.
As you said- if the tenants moved out you don’t have much of a leg to stand on if the granny flat people stay.
So do the house tenants pay the full rent and get the extra money off the granny flat? Or is it 2 seperate amounts for each?
This reply was modified 10 years, 6 months ago by Catalyst.
I’m a bit confused and just wanted to clarify a couple of things
1. the seller does not live in the property.
2. there is a tenancy agreement in place ($400 a week)
all i was saying is that if the tenants living there are renting out the granny flat for cash.
could you guys see any legal problems?
like i said i would have thought that if the tenants on the lease leave and their “cash tenants in granny flat” stay and do not vacate the property. i could with hold the bond (from the tenants on the lease)? and this would be the tenants responsibility to vacate them?
Contracts for land need to be in writing to be enforceable. But they could probably enforce an oral lease becasue of the RTA. What about bond – any been collected and lodged with fair trading etc