It can come as a bit of a shock when your landlord decides to sell your much loved ‘home’. As a result, your head is likely to be spinning with questions such as whether needing to search for a new rental. Are you obligated to keep the property in pristine condition for open inspections? And ultimately what will happen when the property is sold?
Your landlord is legally permitted to sell their property at any time; however, they are still governed by several provisions to protect tenants. These can vary depending on where you live, but there are some common regulations.
So, let’s take a look at what happens when a tenanted rental property is sold.
Can your landlord sell your rental property?
There are no restrictions on when a landlord is allowed to sell their property. The good news is that in every State and Territory is that if you have a current lease (the expiration date has not passed) you cannot be asked to leave. When the property is sold, it is with you – as the tenant – in place. You will be advised that the property ownership has changed.
There can be many benefits for an owner to sell a tenanted property, particularly as it provides consistent income right up until the property is sold.
In some States, such as NSW, a landlord must let the tenant know that they are planning on selling their property when the lease is signed. If they don’t, the tenant has the right to give notice to vacate the property whether they are on a lease or not. Bear in mind that not all States have this provision.
Do I have to agree to viewings and open inspections?
Whilst the landlord has the right to access their premises to show prospective buyers, architects and builders, tenants must be given written notice at least 14 days before the first viewing. You are obliged to make all reasonable efforts to agree on a suitable time and day for the showing. (Note this does vary across each state so check on regulations in your State or Territory). If you agree, make sure you get it in writing and that it is signed by yourself and the landlord or agent.
If an agreement isn’t reached to show the property, the landlord is able to only show the property a maximum of 2 times per week and must give the tenant at least 48 hours’ notice each time. The notice can be delivered by email (if you agree to this communication method), mail or handed to you between 8am – 6pm. You are obliged to keep the premises in a “reasonable state of cleanliness”.
If the landlord has given you notice within the correct timeframe they have the right to show people through the premises, whether or not you agree or whether or not you are there.
You do have the right to be at the premises when the property is open for inspection, or you can have someone else there on your behalf if you are worried about property theft.
It’s a good idea to discuss suitable open times with your property owner/property manager and adhere to that routine each week. This way everyone knows what to expect and when.
Are there any benefits to tenants to allow open inspections?
While the sale of a rental property can be disruptive for tenants, there can also be benefits. Some landlords offer incentives to keep a property inspection ready. These may offer:
- Taking $50-$100 off the weekly rent in return for presenting the property as nicely as possible for viewings
- A week’s free rent when the property sells to help with relocation costs
- A small fee for tidying and preparing the property for an inspection
- A cleaner on the morning or day before the inspection (who doesn’t love coming home to a tidy home!)
- A small thank-you gift such as a box of chocolates or movie tickets after an open inspection
- Offer to provide a reference for their future rental property applications
Are there rules around open home inspections?
Open homes can only take place between 8am and 8pm and cannot take place on a Sunday or public holiday unless you agree and people cannot stay for an extended period. Notice must given to you in writing and the required notice periods differ in each state and territory.
Remember, if you refuse access to the property when the landlord is legally allowed, you may be in breach of your tenancy agreement.
What are my rights regarding the advertising and promotion of the property?
Photography
The property can be photographed outside without your consent; however, they need consent from you, the tenant, to take photos inside the property including photos of your belongings. The landlord should try to discuss and agree on what will be photographed and how the photos will be used. If you are worried about theft, there are several ways you can protect your privacy at open inspections. It is a sensible idea to lock away any valuables that could be easily picked up during an inspection. It includes any jewellery, money or credit cards that you may leave out in the open. The same goes for trinkets, treasures, photographs, framed degrees and medications. The upside is that it will make the property look tidier.
Signage
The tenant must give consent for a ‘For Sale' signboard to be placed on the property outside.
On–site auctions
If the property is being sold via auction, it cannot be held on-site unless you, the tenant, give consent.
Strata property
If the property is in a strata scheme, a for sale sign and auction can be placed / held on the common property.
If you’re concerned about breaching privacy laws contact the Federal Privacy Commissioner or 1300 363 992.
What can I do if I want to terminate my tenancy agreement?
If you have a periodic agreement there is no special termination notice and you can serve a no-reason notice which is normally 21 days. Make sure you check your local legislation for specific time frames in your local area.
If you are on a fixed-term agreement but want to move out because the property is being sold, you may be able to end the tenancy agreement early by mutual consent with the landlord. Make sure you get this confirmed in writing and signed by the landlord or agent otherwise, you might be hit with the costs of breaking the lease.
Some landlords are happy to end the lease early so they can get into the property and fix anything before they go to market. This also means they can access for open inspections. Talk to your landlord or agent about this if this is what you want.
In some states such as NSW, if you are in a fixed-term agreement you may still be able to give the landlord/agent termination notice if:
- They did not disclose the proposed sale before entering into the agreement and
- The landlord has now told you of their intention to sell
What happens if the landlord wants the tenant to leave?
A landlord cannot terminate a ‘fixed term’ agreement for the sale of the property.
If you have a periodic agreement they can issue a notice of termination but only if they have exchanged a contract of sale with a buyer and the contract specifies the property is sold as vacant possession.
If you are still living in your property past the end date of your fixed-term lease you are protected under what is called a Continuing Agreement Tenancy. This can be terminated if the landlord gives you notice that they plan to sell and give you notice to leave when the sales contract is signed. Make sure you check this time frame as they vary from state to state.
What happens to your tenancy after the sale?
If you or your landlord haven’t terminated the agreement your tenancy agreement remains in place and has to be terminated in the correct way.
If you have a fixed term tenancy agreement you cannot be asked to leave before the end of the fixed term. If the property is sold before the end of your agreement the new owner takes over the rights and responsibilities of your previous landlord meaning your existing terms and conditions still apply – including how much rent you pay, how and when you pay it and the expiry date of the fixed term.
What happens to my bond?
When the property is sold, both the new owner and previous owner must notify the Residential Tenancies Bond Authority that the property has changed hands. Your bond will remain with the Bond Authority until the end of your tenancy when the new landlord can make a claim against it or have it paid out to you. You can find out everything you need to know about rental bonds here.
What are the obligations of the new landlord?
The old landlord /agent should provide you with the details of the new owner and advise you when to commence paying the new owner. You don’t need to sign a new agreement.
Please note each state and territory has different rules and regulations when it comes to the sale of rented premises. Make sure you review and understand your specific laws and provisions this is only to be used as a guide.
DISCLAIMER - The information provided is for guidance and informational purposes only and does not replace independent business, legal and financial advice which we strongly recommend. Whilst the information is considered true and correct at the date of publication, changes in circumstances after the time of publication may impact the accuracy of the information provided. LJ Hooker will not accept responsibility or liability for any reliance on the blog information, including but not limited to, the accuracy, currency or completeness of any information or links.
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