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Leon
Leon, Solicitor
Category: Australia Law
Satisfied Customers: 18853
Experience:  BEc Dip Ed, Dip Law (SAB) MTax (UNSW)
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I have been approached to lease out my property to GROH

Resolved Question:

I have been approached to lease out my property to GROH ( department of corrective services). 3 years with option to renew for $400. Is there anything I need to consider before accepting? Is there a link I can look through? Should I update my insurance policy to protect for any damag

Attachment: 2013-11-19_103026_application_for_17406_hay.zip

es etc on my property? I am mainly concerned that the tenants may destroy the property and when they do vacate it will be a mess retaining my bond etc. I have a rental agent dealing with the transaction. The property is a strata titled unit in Kalgoorlie. The department has asked me to make amendments/or check that the unit meets their requirements. Some of the requirements are already in place but others my rental agent will have to check through/organise. I have landlords insurance in place with Allianz but is this sufficient to protect me if something goes horribly wrong - especially since the tenants could well be criminals or under the witness protection program, etc. Your input is most appreciated. Thank you. Meg

Submitted: 4 months ago.
Category: Australia Law
Expert:  Leon replied 4 months ago.
Good Evening

My name is XXXXX XXXXX X am a NSW Solicitor. Thank you for your question, and will do my best to assist you with your question.



What do you mean to lease for $400.00. Is that the rent per week?

Is it to be a residential lease or a commercial lease.

What is the purpose of the lease?
Customer: replied 4 months ago.

Hello Leon,

 

The property is a residential strata unit - 2 bed/2 bath. They are seeking some form of residential lease I understand and most likely the tenant will be a police officer or another employee of the Corrective Services department.

 

Having never had any dealings with the government, just want to make sure I get my i's dotted before entering any agreements with them.

 

My initial request, I tried to attach a zip folder containing the GROH request ( not the tenancy agreement), its just their letter requesting we consider their rental offer.

 

Oh, to confirm - $400 is rental of unit per week.

 

Thank you. Meg.

Expert:  Leon replied 4 months ago.
Good Evening Meg,

It is a standard Residential lease that you need to enter into.

Have they offered to pay anymore than just the rent? Sometimes government departments also offer to pay the rates etc.

Who is the tenant on the lease the department or the actual tenant?
Customer: replied 4 months ago.

Hello Leon,


 


At this stage ( they are just making enquiries) I understand the department signs the lease for 3 years with 1 year option to renew and they put tenants in.


 


Do let me know if there's anything else I need to look into other than a residential lease.


 


Warm regards,


Meg

Expert:  Leon replied 4 months ago.
Good Evening Meg

If they are to pay the outgoings it may be a commercial lease. It sounds like a commercial lease if it is to be for 3 years.

You need to ask them what they will be responsible for. It sounds similar to leases by the defence force where they are responsible for everything even painting when they leave and chin carpets.

You need to ask more questions of them as to what they are going to be paying.

With these type of leases you are guaranteed rent even if they are not tenanted.

Here is some information from the Defence Housing department.

http://www.dha.gov.au/investing/lease-your-property/why-lease-to-us

It will show you what they do.

But you have to ask more questions on what the department is going to be paying.

Does this make sense?
Customer: replied 4 months ago.

Hello Leon,


 


Thank you for that. I think I've got enough to keep me going for a bit. I will ask my rental agent for further details and seek clarifications.


 


Can I just ask you one final point. The property is mortgaged to the National bank ( that is I have a residential investment home loan) on it for negative gearing.


 


If this is a commercial lease I have to enter into - does that cause any issues with the bank? Do they view it differently from a residential lease? I am in 2014 seeking further finance from the bank for further investment lending ( another home loan) so will be using this property to support that lending as well as relying on this lease for my rental income stream? Does it being a commercial lease ( possibly) cause the bank to assess things differently?


 


Thank you.


Meg

Expert:  Leon replied 4 months ago.
Good Evening Meg

No it makes no difference to the bank.

The only difference is a commercial lease has to be registered on title. The bank will need to consent to allow this to happen.

Once the lease is signed they will want to see it. It should not be a problem.

You can continue to negative gear the property.

The bank will continue to act as it currently is.

Is there anything else I can assist you with?
Customer: replied 4 months ago.

Brilliant. Thank you very much Leon.


 


Please finalise this query and put through the charge of $99 if not already collected.


 


Thank you again and have a lovely week ahead.


 


Warmest regards,


Meg

Expert:  Leon replied 4 months ago.
Good Evening Meg,

Thank you for your kind words.

You are very welcome and thank you for using my services.

If I have missed anything, or you have any further questions please let me know

If there is anything else in the future please do not hesitate to ask.

Please do not forget to leave positive feedback.

Regards

Leon

Leon, Solicitor
Category: Australia Law
Satisfied Customers: 18853
Experience: BEc Dip Ed, Dip Law (SAB) MTax (UNSW)
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