The time has come to sell your property, but you think there’s a problem – it’s still tenanted. This needn’t be the nightmare some people think if handled correctly; in fact it has a couple of advantages:
- You are receiving rent so you’ll not be paying for an empty property while it is on the market.
- The property is more likely to attract other investors who will be keen to take on an existing tenant at settlement and start receiving rental payments straight away.
However there are a few legalities you have to abide by and tenants do have rights in the process too. Here are a few answers to frequently asked questions:
What Should I do First?
First and foremost, you must talk to your tenants and tell them your plans as soon as you’ve made the decision to sell. This is a legal obligation and if you’re open and honest with your tenants it can save a lot of heartache throughout the whole process. Remember, it is after all their home and they will be apprehensive about who their new landlord will be. You want to work with your tenants to get the best outcome.
How Can I Make Things Easier for theTenant?
Although it’s not a legal obligation, it’s common practice for the landlord to reduce the rent in the period the property is on the market to compensate for the inconvenience of, for example inspections.
And What About Inspections for Prospective Buyers?
The landlord & their agent agrees:
To give the tenant written notice that the landlord intends to sell the residential premises, at least 14 days before the premises are made available for inspection by potential purchasers, and to make all reasonable efforts to agree with the tenant as to the days and times when the residential premises are to be available for inspection by potential purchasers. The tenant agrees not to unreasonably refuse to agree to days and times when the residential premises are to be available for inspection by potential purchasers.
The landlord, their agent and tenant agree:
That the tenant is not required to agree to the residential premises being available for inspection more than twice in a period of a week, and that, if they fail to agree, the landlord may show the residential premises to potential purchasers not more than twice in any period of a week and must give the tenant at least 48 hours notice each time
Can I Put up ‘For Sale’ Signs and Take Photos of the Property for Marketing Purposes?
If the property is a strata property, you are permitted to display a ‘for sale’ sign and take external photos. For all other properties you must receive tenant approval for these. When it comes to taking photos of the inside, you will need the tenant’s permission or it could be seen as a breach of personal privacy.
What if The Buyer Wants a Vacant Property?
If you do decide you want the property vacated, legislation in New South Wales states landlords must give their tenant notice to vacate within a certain time period, even if the lease is up for renewal. For more information on this, visit the landlord section of the Office of Fair Trading website – www.fairtrading.nsw.gov.au.
What if the Tenant Wants to Move out When I Tell Them I’m Going to Sell?
Some tenants decide they don’t want to live under a new landlord and may want to move out when they find out their rented home is being sold. In New South Wales, if you didn’t advise the tenants when they signed the lease of your intent to sell, they have the right to break the lease, even if it is a fixed term.
If you are using an agent, advice them of your plans – a good agent will make the whole process run smoothly by negotiating and liaising with the tenants for you.
Generally, we find tenants are very amenable because we communicate with them, manage their expectations and keep them updated throughout the process. We have sold plenty of tenanted properties very easily and because we have a database of investors, we also have helped find buyers too!
We have over 40 years in business in the area, so there’s not a lot we don’t know about selling tenanted investment properties. Why not ring us on
02 4954 8833 or call into our office and our friendly and knowledgeable team can help you with your queries.