17 Feb Agent Survival Series – Vol 2A/2016
But it’s in the letting pool. I can’t give vacant possession
Avoiding the 11th hour panic call from your seller
It’s pretty common in unit sale contracts to see holiday letting appointments inserted in the tenancy details information in a sale contract, and a copy of the letting appointment attached (and no special conditions referring to it).
This won’t help buyer or seller for a stack of reasons, the primary one being that a holiday letting appointment with a letting manager is not a tenancy agreement, so vacant possession still applies. In these situations, the buyer typically insist on vacant possession, and to avoid a terminated contract the seller may have to bring their letting appointment to an abrupt end, leaving them liable to the letting manager for damages for loss of income.
As the agent you’ll be peppered with calls from both sides at the 11th hour looking for a solution or someone to blame.
The Solutions (Because we’re over achievers, we’ve got 3!)
1. Longer settlement date
Instead of the usual 30 day settlement period, opt for a term longer than the minimum termination notice under the letting appointment (usually no less than 90 days). This gives the seller time to lawfully exit the letting appointment without penalty.
*2. Special condition – subject to amicable early termination of letting agreement
Use this condition if the parties want to settle earlier than what we’re suggesting above. It provides that the contract is subject to the Seller reaching an agreement with the letting agent and provide vacant possession, failing which the Seller can terminate.
*3. Special condition – buyer agrees to enter into replacement letting agreement
Use this condition when the buyer would like to continue to keep the property in the letting pool. There can be many other variations to these. As always, give us a call if you would like any help before the parties are locked in.