What you need to know if you are selling your rental property

Selling Rental Property

Selling a rental property involves various legal obligations and considerations to ensure a smooth transition for both landlords and tenants. Here’s a breakdown of what you need to know if you plan on selling your rental property:

1. Communication with Tenants: It’s essential to inform tenants in writing when you decide to sell the property. This notification needs to  be provided before putting the property on the market.

(a) A periodic tenancy – Notice that the property is going on the market and the sales agent will be in contact with you to discuss the process.  You need to advise them in the letter that they will be given 90 days notice to vacate once an unconditional contract is in place.

(b) A periodic tenancy – You can give the tenant 90 days notice to vacate immediately and then put the property on the market once the tenant has vacated.

(c)  A fixed term tenancy – Notice that the property is going on the market and the sales agent will be in contact with you to discuss the process.  Advise them that the property may be purchased by an investor, but if not the contract will require them to vacate at the end of their fixed term.

2. Access to the Property: Landlords must obtain the tenant’s permission before entering the property for activities such as taking photographs or showing it to potential buyers.  Tenants can’t unreasonably refuse access, but they can set reasonable conditions. They may: limit access to certain days and times of the week, refuse open homes and auctions at the property. Tenants can insist that the property be shown to potential buyers by appointment only. They can also ask for a temporary rent reduction in return for permitting open homes (the landlord does not have to grant this). Tenants have the right to be present at the home at all times, including during open homes.

3. Negotiation and Agreement: Open communication and negotiation are key. Landlords and tenants should agree on a schedule for property viewings and access, taking into account the tenant’s preferences and needs. All agreements should be documented in writing and signed by both parties.

4. Transfer of Ownership: After the sale is completed, the landlord must inform the tenant of the new owner’s details and when they will take over. The new owner should be provided with a copy of the tenancy agreement. Additionally, the old landlord’s interest in the bond will pass to the new landlord.

5. Address for Service: Both the old and new landlords must notify Tenancy Services if they hold the bond. This ensures that any changes in ownership are properly recorded and managed.

Overall, clear communication, mutual understanding of rights and responsibilities, and adherence to legal requirements are essential for a successful sale of a rental property with tenants in place.