Vendors often need to lease back the Property that they have just sold. It is not always a straightforward process between the parties as they have different expectations of how this works in practice. It is essential that the details are clearly documented in the Contract for Sale for the Property.
Issues for Vendors and Purchasers to consider prior to Exchange include:
- the parties entering into a Lease Agreement, a copy of which should be attached to the Contract for Sale;
- a Condition Report on the Property needs to be carried out by both the Landlord and the Tenant following the sale and before the commencement of the Lease;
- the appointment of a managing agent for the Property;
- payment and lodgement of the rental bond;
- obtaining appropriate insurance(s), e.g. for the Property and if applicable, Landlord insurance;
- negotiate the keeping of pets before entering into the Lease.
There are a number of other arrangements that parties to a sale enter into when the Vendor of the Property seeks to remain in the Property following the sale, such as under a Licence Agreement. However, for the protection of all the parties, entering into a Lease is usually the simplest way forward.