Landlord Selling Unit, What Can Tenant Do?

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Re: Landlord Selling Unit, What Can Tenant Do?

Post by therat » Mon, 25 Jan 2010 11:13 am

Saint wrote:I'm currently in the same situation and we've been informed that our TA has to be transferred to the new owner by law unless an appropiate compensation package can be agreed. Do remember you pay stamp duty which is based on the rental amount and lenght of TA.
I did purchase a private condo with tenant staying.
Let me share with you.

We went to view condo. Agree and understand there is a tenant staying. If we purchase , we will purchase with tenancy and will take over the TA. Which mean we agree on the mthly rental and the length of TA.
Nothing change to the tenant. They still pay to the mthly rental but to the new owner bank account.

If the new owner agree to purchase with tenancy. The tenant should not be worry that their TA is not protected, etc.

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Post by ScoobyDoes » Mon, 25 Jan 2010 12:32 pm

Ours was a different case..... our landlord sold the unit telling the new owner we would move since it was their intention to move in.

This was only conveyed to me after the unit was sold and in the end i had to enforce the TA as it was signed and stamped and i stayed the full two years of the TA. Not only that, but because i screwed the plans of the new owner we then agreed a 1-yr extension which we are half way through, and the owner is selling again, but for profit.

We should have another new landlord in a couple of months as it was just sold........again!

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Post by brittanny » Mon, 25 Jan 2010 3:18 pm

There is no comprehensive law dealing with landlord and tenant relationship, as such Singapore follows the English common law system. General provisions however are mentioned in the Civil Law Act, Distress Act and Evidence Act, none of it worthwhile to mention here.

Your tenancy agreement does not provide for early termination - since it is silent, the parties to the contract are obliged to honour its term / fulfil their respective obligations prescribed.

V. important: read your tenancy document and note whether there is an assignment/successors benefit clause. It is a very crucial term in a contract to bind the successor-in-title:
- if there is a provision then yes the new landlord is bound to observe/perform the contract
- if it is silent/lack of an assignment provision u have no recourse against the new landlord at all

Ok here comes the real deal :
- yes it is arguable that you can stay put in the premise with a stamped legal document in hand. u can intimidate both the new and old landlord by pointing out the existence of the clause. if however through the assignment provision and new landlord failed to perform the contract, it can be difficult to go after the new landlord in court as the "correct legal" way to assign even with a provision in the tenancy is by way of signing of a novation deed between the 3 parties. put it this way, if you put yourself in the new landlord/potential buyer's shoes, it is bad investment and lack fairness (a) to have to fork out/refund a 2 mths deposit when you are not recipient of the deposit (b) just becos an assignment clause exist in a tenancy agreement which you did not sign off as a party (c) you have been promised vacant possession in the sale and purchase agreement by the vendor

- best for you to go after the party of the tenancy agreement i.e. old landlord. there is a clear breach of contract by your landlord. firstly thru negotiation between parties: ask for moving costs, 3mths rent (vs 18 mths), agents fees refund, and more importantly refund of security deposit.
if negotiation fails, then get yourself a lawyer and move the case to ADR (CASE or SMC): ask for moving costs, agents fee paid, 18mths' rent and refund of security deposit. last option should be formal court proceeding which is usually longer and more expensive.
there is no specific rules on damages to be awarded by way of ADR/the courts, the test of reasonableness always apply - though u wish to plead for 18mths, u will most likely end up with 3 to a max of 6mths.

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Post by x9200 » Mon, 25 Jan 2010 4:17 pm

Thanks brittanny for your usual care of the details and comprehensive overview. I have one question though:
brittanny wrote: V. important: read your tenancy document and note whether there is an assignment/successors benefit clause. It is a very crucial term in a contract to bind the successor-in-title:
- if there is a provision then yes the new landlord is bound to observe/perform the contract
How any clause in the TA between the tenant and the old landlord can effectively bond a third party which is the new landlord? It seem unreasonable.

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Post by jjk » Mon, 25 Jan 2010 5:21 pm

I see...thanks for all the inputs. Yes, my TA is stamped. Stamp duty has been paid. There is a clause that says the premises shall be sold subject to this tenancy.

Hmmm, so from brittany's post, seems like tenant can only ask for a few months' rent as opposed to say 18mths rent (assuming tenant stays for only 6 mths before being chucked out). Am hoping to find a win-win solution for all. No point going through much hassles.

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Post by brittanny » Mon, 25 Jan 2010 5:23 pm

The successor and assign clause is a salient clause in any agreement that is often overlooked

Successor in this instance, is defined as the next person taking over the title of the property.
For legal definition http://www.yourdictionary.com/law/successor

I don't know how the clause is worded in the OP's tenancy agreement or whether such a provision exist in it, but if there is one i reckon it may be along the line of this diplomatic clause :
"This tenancy and all terms, conditions and provisions hereof shall be binding upon and shall inure to the benefit of the successors and assigns of the respective parties hereto. The Tenant agrees that it will not assign or sublet this tenancy without the written consent of the Landlord first obtained."

--- hmm, not so "diplomatic" after all, innit?!?

There are so many variants of assignment clauses, some will get you screwed, some will not. For your reading pleasure, if it is of interest to you: http://www.sitenet.com/toolkit/lease/database/l15.htm

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Post by Saint » Mon, 25 Jan 2010 5:37 pm

This is what my TA states, quite clear really, any new owner is required to honour the current agreement in full.

(l) During the currency of this tenancy, to allow the Landlord or its representative at all reasonable times and by prior appointment to bring any interested parties to view the said premises in the event of a prospective sale thereof. The said premises shall be sold subject to this tenancy.

Just as if I wanted to terminate my contract early by moving, I would have to probably paid 3 months rental, same applies to the Landlord, whether that's the current or new owner.

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Post by brittanny » Mon, 25 Jan 2010 5:49 pm

Nice one saint, yep legal novation is necessary unless u opt out by accepting the compensation package by your old landlord.

jjk, you can stay put if you so wishes as it is provided for in the TA : "The said premises shall be sold subject to this tenancy"

Negotiation for compensation and moving out is now optional, and entirely at your discretion

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Post by x9200 » Mon, 25 Jan 2010 6:45 pm

Brittanny, I understand what successor is but I still see nothing enforcing the new landlord by the TA of the old one and the tenant. To enforce the new one a separate agreement between all the parties or at least both the landlords is in my opinion necessary.

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Post by brittanny » Mon, 25 Jan 2010 8:07 pm

x9200, yep agree

i've said this earlier:
[/quote]yes it is arguable that you can stay put in the premise with a stamped legal document in hand. u can intimidate both the new and old landlord by pointing out the existence of the clause. if however through the assignment provision and new landlord failed to perform the contract, it can be difficult to go after the new landlord in court as the "correct legal" way to assign even with a provision in the tenancy is by way of signing of a novation deed between the 3 parties

here, the tenant simply needs to demand that the assignment clause has triggerred a novation event and that the parties need to enter into a deed of novation. if both the new landlord and old landlord refuse to sign a deed of novation, legal proceedings is then initiated for strict enforcement of the clause. time n cost need to be considered if one wish to go all the way.

i've known that there are parties who simply don't complete the novation transaction but however continue to honor the arrangement, wishing to save on legal costs...

i've also known of tenants who simply give up due to the time and costs involved to enforce such provision, less time will be spent to look for other dwelling place...sometimes something are just not worth the effort and energy

it is always easier to go after the original party signing the contract, as such my earlier recommendation is to go after the old landlord

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Post by Saint » Mon, 25 Jan 2010 11:49 pm

x9200 wrote:Brittanny, I understand what successor is but I still see nothing enforcing the new landlord by the TA of the old one and the tenant. To enforce the new one a separate agreement between all the parties or at least both the landlords is in my opinion necessary.
There are 4 solution to this situation

1) The property is sold and the new owner has to honour the TA in full, x900, that's the law, not a lot the new owner can do about it

2) If the current owner is desperate to sell the property vacant for whatever reason, the owner agrees a compensation package with the tenant to vacate the property prior to completion of sale.

3) If prospective new owner is desperate to purchase property vacant, he agrees a compensation package with tenant to vacate property on completion or within agreed time.

4) Or both the current and prospective owners agree to split the compensation package to be paid to the tenant to vacate property at an agreed date.

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Post by x9200 » Tue, 26 Jan 2010 7:57 am

Saint wrote:1) The property is sold and the new owner has to honour the TA in full, x900, that's the law, not a lot the new owner can do about it
But nobody can point to that law or at least a reputable source of information and this is where I have a bit of the problem. You said earlier you were told... by whom? I have no reason not to believe you but would welcome some more documented fact based knowledge.

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Post by x9200 » Tue, 26 Jan 2010 8:02 am

brittanny wrote:x9200, yep agree
i've said this earlier:
Yes, you said, but you also said this:
brittanny wrote: V. important: read your tenancy document and note whether there is an assignment/successors benefit clause. It is a very crucial term in a contract to bind the successor-in-title:
Seems to be contradictive...

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Post by brittanny » Tue, 26 Jan 2010 12:02 pm

there are other more clear cut scenarios where the clause works just fine. eg: landlord dies and the property goes to his estate, and the beneficiary/next of kin (next person to hold the title) is bound.

also, there is no specific law governing the TA, a TA is governed by basic contractual law principles. what is agreed upon by the parties in a perfected document stands and should be honoured by the parties.

you may refer to this articles : http://www.trinity-law.com/TrinityLawCo ... ENANT.aspx

WHAT ARE THE BASIC RIGHTS OF THE TENANT? - Your rights are usually expressly provided in the lease agreement. However, the common law will imply certain rights even if these are not specifically provided in the lease agreement. Some examples are the implied covenants for quiet enjoyment of the premises, which means that you can enjoy the use of the premises without interference. Other implied covenants are that there shall be no derogation from the grant. That means all the terms granted to you must be fully observed by the landlord. The implied covenant for good title and possession of the premises for the fixed term is yet another. So long as the fixed term given has not expired, the original parties to the lease agreement have to fulfil their respective obligations.”

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Post by QRM » Tue, 26 Jan 2010 12:16 pm

Spoken like a true lawyer :shock: plain English please...

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