If you have tenants on a lease, you can still consider selling your property if the right opportunity arises.
Learn your rights and your obligations as a landlord and make a successful sale.
Selling with tenants on a lease is within your rights as a landlord. If you want to sell your property without hindrance, bear in mind there are certain restrictions.
Your limitations as a landlord
The law restricts the amount of access you can have to the property while it is being rented out. This is because it’s your responsibility as a landlord to ensure that the tenant’s reasonable peace and privacy are not interrupted by you, an agent, a property manager or any other person under your instruction.
When you are trying to sell your property you are allowed to enter it, but only at certain times for certain reasons:
- To obtain a property valuation: you can do this no more than once a year and giving at least 7 days notice to the tenant.
- To show the property to potential buyers: giving 2 weeks written notice before the first inspection.
How to do subsequent inspections
The landlord and the tenant must make all reasonable efforts to agree on the days and times for showing the property to prospective buyers.
For the first inspection you must give 2 weeks written notice, but for subsequent inspections you must try to reach an amicable agreement with the tenant.
It’s important that you follow the requirements to access the property or the tenant could seek compensation and you could have a penalty imposed.
Problems with inspections and gaining access to your property
The law says that tenants must not deny or hinder your right to access your property if proper notice has been given. Therefore, they must not unreasonably refuse to agree on days and times for the inspections.
If you cannot come to an agreement with the tenant about inspections times, you are within your rights to do 2 inspections per week, giving 48 hours notice to the tenant each time.
In the worst case scenario, if the tenants refuse to allow you access to the property when you are legally allowed, they are in breach of the tenancy agreement. You can then apply to a Tribunal for an order authorising you or any other person to enter the premises.
Time limits on access
In most circumstances there are certain limits you must bear in mind when accessing the property. You should not:
- enter on Sundays or public holidays,
- enter before 8am or after 8pm,
- stay longer than necessary.
These limits do not apply if the tenant agrees otherwise, or under other special circumstances such as an emergency.
Do landlords need to compensate the tenant?
If you are following the requirements to access the property while it’s being shown to prospective buyers, you don’t have to compensate the tenant with a rent reduction or any form of recompense.
What if the tenant wants to leave?
If the tenants want to leave, they need to end the residential tenancy agreement they have with you.
- If it is a periodic agreement, they are allowed to end the agreement by simply giving you a no reason notice of 21 days.
- If it is a fixed term agreement, they may be liable to pay certain costs, like the rent until a new tenant is found or the fixed term period ends, whichever occurs first.
Important exception: if you offer the property for sale and you didn’t tell the tenants before signing the lease that would be the case, then they could leave early by giving you a 14 day termination notice and without paying any costs.
Always use your property manager to communicate fairly, and openly with your tenants if you plan to sell the property.