There are times during management of an investment property that it becomes necessary for a termination notice to be issued. There are a lot of regulations around how these notices can be delivered and the amount of time for each type of termination varies, so I thought that I would give you an idea today of what to expect if you need to send a termination notice to your tenant. The name of each notice gives away what you are sending the termination notice for, but lets take a look at them anyway:
SALE OF PROPERTY
This notice is given when the property has been on the market for sale and the sale on the property has exchanged. On the day of exchange of contracts, you are able to give your tenant notice for the sale of the property. This happens where the contract is stating that the property has been sold with vacant possession. This means that your tenant is not on a fixed term lease. You are able to provide your tenant with 30 days notice to vacate the property.
END OF FIXED TERM
Towards the end of a tenants fixed term lease, you might decide that you do not want to continue with their lease. This is the notice that you can give at that time. It is important to remember that they must be on a fixed term lease for you to be able to give them this notice. The notice period for end of fixed term is 30 days.
NO GROUNDS
This particular notice is used quite a lot. This notice, as the name suggests, is for no specific reason, the tenant needs to be on a periodic lease for you to give them this type of notice, which means that the fixed term portion of their lease has ended. The notice period for this type of termination notice is 90 days.
NON PAYMENT OF RENT
If your tenant falls behind in their rent by more than 14 days, this is the notice that can be given to them, asking them to provide vacant possession of the property. It can only be issued from the 15th day of arrears. The main thing to know about this type of notice, is that if the tenant pays all outstanding rent by the termination date, then this notice is rescinded. The notice that can be given for non payment of rent is 14 days.
BREACH OF THE AGREEMENT
This notice is given when a clause of the lease has been broken. In most cases, you would be working with a tenant prior to having to issue this notice, perhaps issuing them with a warning letter telling them that if they do not stop breaching their lease, they could be issues with a termination notice. You would give this notice if those negotiations failed and you were not able to come to a satisfactory outcome from the breach. The notice period required for this termination is 14 days.
FRUSTRATED AGREEMENT
This notice is for when something big happens. I have only used it myself in a few cases over my real estate career. It is used mostly when the property has been made uninhabitable due to a fire, flood, storm etc… This allows the tenant to be able to move on to something that is safe for them and give the landlord free access to the property for their insurance company to attend to the required works. This notice is immediate and has no fixed notice period.
DEATH OF SOLE TENANT
As the name suggests, this notice is given when the tenant at the property has passed away and there are no other tenants living in the property. Traditionally this notice would be given to the relatives who are coming to finalise the tenancy and clean the property. There is no required period for this notice either, as it is generally a case of working with grieving families to arrange for possession to be returned to the landlord and in most cases, this is a negotiated thing.
The other thing to keep in mind is that when a termination notice is issued, it needs to be done in accordance with the Residential Tenancies Act (2010).
If the notice is hand delivered in person to the property, we are able to hand the notice to the tenant or a person who is apparently over the age of 16 at the residence or a business address.
The notice can also be hand delivered to the letter box at the property.
If the termination notice is posted to the address, a further 7 days needs to be added to the notice period to take into account the time for post.
The other way to send the notice is via email, but the tenant has to have signed a document approving the agency to send notices via their email address, without this approval, you then need to send the notice in a different format (post or hand delivery)
Finally, once a tenant has been served with notice, they are then able to vacate the property at any time. This is a really important detail to be aware of, especially if you are banking on the rent coming in for a further 90 days (for example) and the tenant finds something within 2 weeks of being served their notice.
If you have questions about termination notices and they are not addressed in this article, please feel free to email me at tina.case@professionals.com.au or give me a call at the office on 63525125.
