Selling a fixed-term rental property

Selling a property can be a stressful event at any time. When the property is rented, everyone should understand their rights and responsibilities. When a rental property is being put on the market for sale, it can be stressful for both owners and tenants. Owners sell their properties for many reasons; it is important for them to respect that it is the tenants’ current home. The process can be less stressful when owners and tenants understand their rights and responsibilities throughout the sale process. There are mainly 2 different scenarios that could apply when an owner sells a property that is tenanted.

Scenario 1: Selling a tenanted property where the buyer will take over as the new landlord.

The owner sells the property to a buyer who wants to continue renting to the existing tenants. The buyer takes over the tenancy as the new landlord. Scenario 2: Selling the property where the buyer wants a vacant property The owner sells the property to a buyer who wants the property to be vacant as a requirement in the sale and purchase agreement that has gone unconditional. If the tenants are on a fixed-term tenancy, the owner can end the tenancy on or after the expiry with at least 90 days’ written notice with stating the buyer specified vacant possession as a requirement in the unconditional sale of the property. A fixed-term tenancy cannot be ended early by the owner or tenant, unless the tenant agrees in writing to end it. If the tenant doesn’t agree to ending the fixed-term tenancy before expiry, the owner may choose to negotiate a later settlement date of the sale with the buyer, or the property must be sold with the tenancy in place.

Owners must let tenants know they’re selling. If an owner puts the property on the market, they must tell the tenant in writing before they put it on the market. A tenant may not react well to a real estate agent arriving unexpectedly on their doorstep.

Ending a fixed-term tenancy early Generally, an owner or tenant cannot give notice to end a fixed-term tenancy early. The best exception to this rule, is when the owners and tenants can agree to end the tenancy early.

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