Selling a property can be a stressful event at any time. When the property is rented, everyone should understand their rights and responsibilities.

Landlords sell their properties for many reasons. But remember that the tenant has a tenancy agreement that gives them the right to live in the house. You can make it less stressful by making sure everyone knows what's happening throughout the sale process.

Different rules apply when a rented property is being sold by mortgagee sale.

Mortgagee sale

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Landlords must let tenants know they’re selling

If a landlord puts the property on the market, they must tell the tenant in writing. They may also choose to let the tenant know in advance. A tenant may not react well to a real estate agent arriving unexpectedly on their doorstep.

Consider delivering the letter to the tenant in person so you can talk about it face to face. You can then also talk about access to the property. You might even set up a time for the tenant to meet the marketing team.

Access to the property

Landlords must get the tenant's permission before entering the house to take photos. The tenant can refuse to allow any photographs of their personal possessions.

Landlords must also get the tenant's permission to show possible buyers through the house. You may also want to show through a registered valuer or building expert.

Tenants can’t unreasonably refuse access, but they can set reasonable conditions. They may:

  • limit access to certain times of day and days of the week
  • refuse open homes and auctions at the property
  • ask to be present during open homes.

Tenants may not agree to open homes or auctions at the property. Instead, they can insist that the property be shown by appointment only. They can also ask for a temporary rent reduction in return for allowing open homes. The landlord does not have to grant this.

If you're a landlord, talk to your tenant before planning for open homes or an auction at the property. You will need the tenant's permission for specific dates and times.

Communication and negotiation are important. Once everyone’s agreed to a schedule of access, put it in writing and make sure it’s signed by everyone involved.

When the property is sold

The landlord must tell the tenant who the new owner is and when they’ll take over. The landlord should also provide the new owner with a copy of the tenancy agreement.

Once a new owner takes possession of the property, they must tell the tenant:

  • their name
  • their contact details and an address for service
  • how to pay the rent (e.g. the new bank account number).

The old landlord’s interest in the bond will pass to the new landlord. This means that the old landlord can no longer claim any bond, unless they do so before the date of settlement (or date of possession, if this is earlier). You should seek independent advice to make sure any claim to the bond will not affect the sale agreement.

If Tenancy Services holds the bond, both the old and new landlords must send in a completed change of landlord/agent form.

Download a change of landlord/agent form below.

Ending a tenancy if the property is sold

Often when a rented property is sold, the tenancy continues. The new owner simply becomes the new landlord. But sometimes the buyer doesn’t want tenants.

If this happens, a condition of sale will be ‘vacant possession’. This means that the property has to be empty by the time the sale goes through. If the tenancy is periodic, the landlord must give the tenant at least 90 days’ written notice to end the periodic tenancy so the house will be empty for the buyer.

Giving notice to end a tenancy

If the property is rented for a fixed-term, the property must be sold with the tenancy and tenants in place. The buyer then becomes the new landlord for the rest of the fixed-term.

The landlord may be able to sell the property empty if the tenant agrees, in writing, to end the fixed-term early. The tenant doesn’t have to agree to this and may negotiate certain conditions.

Ending a fixed-term early

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