What if the property is leased?
The contract should specify whether the purchaser is entitled to vacant possession of the property or receipts of rents and profits at settlement. If the Purchaser is entitled to vacant possession and the property is leased, the vendor must terminate the lease in sufficient time to ensure that the tenant will have left the property by settlement date. In these circumstances, care should be taken to ensure that the obligations of the landlord under the Residential Tenancies Act 1997 have been complied with. This Act contains a number of requirements in relation to termination of a residential lease.
If the contract provides that the purchaser is entitled to the receipt of rents and profits, the lease continues after settlement date. In this situation, the purchaser is required to observe and perform and be bound by the obligations of the landlord under the lease from settlement, and shall be entitled to the receipt of rents and profits from the date of settlement.
Should a purchaser want to terminate the lease, legal advice should be obtained as notice periods to end a tenancy may vary depending on the lease in effect.
