Why is the long vacancy period in the head lease required? This sounds excessive.

Category: Owning SDA

Firstly this is a compliance issue. Compliant SDA Housing Providers are required by the SDA Rules to ensure the long term stability of availability of SDA properties. The NDIA is paying owners well above market to account for the known situation where it may take a participant a number of months to make the transition in your property. The rules are in place (and reflected in our members head leases) in order to allow tenants the time they need. Secondly this also allows SDA Providers the confidence they need in order to go out and make promises of places to participants without any concern that an owner may pull the property at the last minute. This would be a minor inconvenience to the SDA Provider but absolutely devastating to the Participant. We can not allow this to be even a remote possibility. Lastly, it is very relevant to note that our Members only gets paid when you do. So your property on their books is costing them money every day there is no tenant. Out of context, the vacancy terms in the lease may sound heavily weighted in the SDA Providers favour. However, the commercial reality is that there is no situation where our Members would keep control of your property if they were not 100% confident in placing a tenant. Why would they carry management costs for an empty property?

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