SELLING a property with tenants in residence can present a myriad of challenges for property managers in Queensland. Striking a balance between the needs of the property owner, the rights of the tenant, and compliance with the Residential Tenancies and Rooming Accommodation Act 2008 is essential in ensuring a smooth transition.
The Residential Tenancies Authority (RTA) underscores the importance of proactive planning by property managers and owners to mitigate potential disputes and non-compliance issues. Crucially, tenants must be afforded quiet enjoyment of their rental property throughout the selling process.
Understanding the intentions of the property owner before offering a lease to a tenant is paramount. If a property is slated for sale while a lease is in effect, property managers and selling agents must advise owners that a fixed-term tenancy agreement takes precedence over a property sale, mandating the lease’s fulfillment even upon sale.
In cases where a property is to be sold with vacant possession, termination of a tenancy can only occurs under specific conditions outlined by the Act:
- For properties under a fixed-term lease, termination can be initiated at the agreement’s end with two months’ notice to the tenant.
- In instances of periodic leases, termination requires two months’ notice at any time.
When a property is listed for sale with vacant possession, the sales agent may need to accommodate the two-month notice period within the contract’s timeframe to facilitate settlement after the tenant vacates.
Should a tenant decide to terminate the agreement within the first two months of a tenancy due to undisclosed intentions of property sale, they are entitled to serve a Notice of intention to leave with two weeks’ notice.
Before any selling activities commence, landlords must issue a Notice of Lessor’s intention to sell the premises to the tenant.
Entry to the property necessitates an Entry notice provided to the tenant with a minimum of 24 hours’ notice. Furthermore, entry must occur at reasonable times and adhere to health and safety regulations, with penalties applicable for unlawful entry.
The Act strictly regulates selling strategies, prohibiting open houses and on-site auctions without written consent from the tenant. Likewise, using images displaying the tenant’s possessions in advertising requires written consent to avoid breaching the Act.
Effective communication among all parties is vital in streamlining the selling process.
While fixed-term leases must be honoured post-sale, landlords and tenants may negotiate mutually agreeable termination terms, with tenants potentially seeking compensation.
While some tenants have reported a seamless experience during the process of selling a property with tenants in residence, others have expressed concerns and challenges they have faced.
Some tenants have emphasised the importance of clear communication and awareness of their rights, which they felt were not adequately addressed.
However, for some, the primary issue has been navigating the process of breaking the lease.
