Selling a Tenanted Property in NSW: A Guide for Landlords and Tenants

Selling a rental property that is currently tenanted involves legal and practical considerations for both landlords and tenants. In New South Wales (NSW), there are specific laws that protect tenants' rights while allowing landlords to proceed with a sale. This guide outlines the key points to help both parties navigate the process smoothly.

Can a Landlord Sell a Tenanted Property in NSW?

Yes. Landlords can sell a property at any time, including when it is occupied by a tenant. However, they must comply with NSW tenancy laws, which safeguard the tenant's rights during the sale process.

• If a tenant is on a fixed-term lease, they cannot be asked to vacate the property before the lease ends unless both parties agree.
• If the tenant is on a periodic lease, the landlord can issue a 30-day termination notice after a contract of sale has been signed, and the contract specifies the property will be sold with vacant possession.

Disclosure Requirements for Landlords

In NSW, landlords must disclose if they are planning to sell the property before the lease agreement is signed. If this is not disclosed, and the landlord later decides to sell, the tenant has the right to terminate the lease with 14 days' notice, even during a fixed term.

Access for Inspections and Open Homes

NSW tenancy law permits landlords to show the property to prospective buyers, but there are rules to follow:

• Landlords must provide at least 14 days' written notice before the first showing.
• After that, up to 2 inspections per week are allowed with at least 48 hours' written notice each time.
• Notice must be delivered in person, by post, or by email (if agreed).
• Tenants do not need to agree to each inspection, but the landlord must follow notice protocols.
• Inspections must occur between 8am and 8pm, and not on Sundays or public holidays unless agreed to by the tenant.

Tenants must keep the property in a reasonable state of cleanliness but are not required to maintain it in perfect display condition.

Photography and Advertising

• Exterior photos can be taken without tenant consent.
• Interior photos that include tenant belongings require written consent.
• A 'For Sale' sign outside the property requires tenant consent unless it is on strata common property.
• On-site auctions require tenant consent unless conducted on common property in a strata scheme.

Incentives for Tenants

Some landlords offer incentives to encourage tenant cooperation during the sales process. These may include:

• A temporary rent reduction
• A one-time payment
• Providing a cleaner before inspections
• Offering a positive rental reference

If the Tenant Wants to Move Out

• On a periodic lease, tenants can give 21 days' notice without providing a reason.
• On a fixed-term lease, tenants may request to terminate early by mutual agreement. If the landlord failed to disclose plans to sell before signing the lease, tenants can give 14 days' notice after being informed of the sale.

What Happens After the Sale?

If the lease has not been legally terminated, it continues under the same terms with the new owner.

• The new landlord inherits all the responsibilities of the previous owner.
• The tenant continues to pay rent under the same conditions.
• The bond stays lodged with the NSW Rental Bond Board until the tenancy ends.
• The outgoing landlord must notify the tenant and the Bond Board of the change in ownership.

Final Advice

Clear communication and compliance with NSW tenancy laws can make the sale of a tenanted property a straightforward process. Whether you’re a landlord selling your investment or a tenant managing your rights, understanding your legal obligations ensures everyone is protected.

Disclaimer: This guide is for informational purposes only and does not constitute legal advice. Always refer to the NSW Fair Trading website or seek legal counsel for the most accurate and up-to-date information.