What do I need to do when selling my tenanted rental property?

Ask Kiri Barfoot - your property management questions answered

If you're considering selling your rental property while it's tenanted, there are a few steps you can follow to ensure the process runs smoothly.

Communication is key

Selling a property can be stressful for all parties. To minimise the impact, keep the lines of communication open.

The landlord, the property manager (if you have one), the real estate agent and tenants should all be on the same page and aware of what's happening with the sale of the property.

Give notice before you put the property on the market

Your tenants must be provided with written notice before the property is listed for sale. Consider delivering the notice in person so you can discuss the situation face-to-face.

This could be an opportunity to talk about access to the property, or to set up a time for the tenant to meet the real estate agent.

If your rental is being managed by a property manager, advise them of your intention to sell as soon as possible.

Marketing photographs of the property

As a landlord, you must get permission from your tenants before entering the property and taking photographs. The tenants can refuse to allow the landlord (or their appointed real estate agent) to take and use - for marketing purposes - photographs of their personal belongings.

Access to the property

Landlords and their real estate agents have the right to show potential buyers, registered valuers or building experts through the property. This cannot be done without getting the tenant’s permission.

Before including open homes or an on-site auction in the marketing campaign, the landlord should discuss this with the tenant. They will need to get the tenant’s consent for specific dates and times for these events.

While tenants cannot refuse access on unreasonable grounds, they can set reasonable conditions for allowing people through their home. For example, they may limit access to certain times of the day or days of the week, ask to be present during open homes, or refuse open homes and auctions on-site and insist on appointment-only viewings.

Tenants may request a temporary rent reduction for the inconvenience of allowing open homes. The landlord does not have to grant this request.

Any access schedule that has been agreed to with the tenant needs to be in writing and signed by all parties so that it’s clear and understood by all.

After the sale 

When the property has been sold, the landlord must inform the tenant of the following:

  • The name of the new owner
  • Their contact details and an address for service
  • How the tenant is to pay the rent (e.g. the new bank account number)

The landlord should also provide the new owner with a copy of the tenancy agreement.

When the property is sold, the original landlord's interest in the bond will pass to the new landlord. This means that the original landlord can no longer claim any part of the bond, unless they do so prior to settlement date (or date of possession, if this is earlier).

Ending a tenancy if the property is sold

The new owner may choose to purchase the property with 'existing tenancies', in which case the tenancy will continue under the existing terms and conditions. Another option is to purchase the property with 'vacant possession' meaning the property has to be vacant by settlement date.

In the case of a periodic tenancy, the vendor/landlord must provide the tenant with a minimum of 42 days’ written notice to end the tenancy.

If the term of the tenancy is fixed, neither landlord nor tenant can give notice to terminate the tenancy prior to the fixed term expiring, unless both parties agree to terminate sooner. The tenant doesn't have to agree to this, and may negotiate certain conditions. Learn more about tenancy types.

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