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November 6, 2018

What happens if you decide to sell during a tenancy

Rights and obligations for tenants and landlords if you decide to sell during tenancy

The rights and obligations of both the tenant and the landlord including notice periods differ depending on whether your tenant is on a periodic tenancy or fixed-term tenancy.

A tenant cannot be forced to vacate the property just because you have a buyer. There are legal obligations that must be met to terminate both a fixed-term and periodic agreement.

The sale process can impact the tenant’s “quiet enjoyment”, a term referred to in tenancy legislation as a right of the tenant during their tenancy. The sale process can often result in an unhappy tenant who may become uncooperative during the time the property is for sale.

  • To encourage the tenant to co-operate fully with the marketing strategies and inspection times, and to have the property clean for inspections, these popular options may be considered:
  • Consider offering the tenant a cleaner to come once a week before the open for inspection, this is a good way to keep the tenant on side.
  • Offer compensation to the tenant by reducing the rent payable for the selling period.
  • The recommended method of compensation to tenants for rent is via a Rent Rebate.
  • Understand the following legislation, rebate concept and system involved for a Rent Rebate and discuss the process with the lessor so they understand how it would work.

If you know there is an intention to sell the property prior to a tenant moving into your property, you must advise your property manager as there are legal requirements relating to notices that must be issued prior to the tenant signing their agreement.


Key takeaways

The selling process with a tenant in place is a delicate and sometimes unpredictable situation. You should work very closely with your property manager to ensure the process is handled with utmost care. Besides the benefit of having them communicate with your tenants on your behalf, there are numerous benefits that they can provide to potential buyers, such as copies of the maintenance history of rental appraisals. Open and honest communication is critical to ensuring that everyone’s best interests are upheld and an amicable solution is achieved for all parties.

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