Selling a Property when Tenanted
At first thought, some landlords think it is overly complicated to try to sell a property with tenants in it, but there are workable solutions to consider, which can make the process of selling your home less invasive for your tenant. If you plan well and make sure your communication is open and understanding of the impact on your tenant, hopefully the process will be a positive and successful one for everyone involved.
Providing Tenants of Notice to Vacate
If you are selling your primary residence that you have rented out, you are able to instruct the real estate agent who manages the property to provide written notice to the tenants of your intention. This ‘notice to vacate’ is permissible and be sure to discuss timings with your real estate agent as there are minimum timeframes depending on the type of lease signed and in which state of Australia your property is located in.
In Victoria, for example, a landlord must give tenants 60 days notice to vacate the property, stating that ‘the property is being sold with vacant possession’. In NSW it is 30 days. You should check with your state’s Real Estate Institute for local terms. In most states you can issue a notice to vacate with no reason if you give 120 days notice.
If the property is being managed by the same agents who are selling your home, it will be a smoother transition. A good property manager will help find the tenants a new apartment or house to move into as well, ensuring a smooth transition.
Tenanted Investment Properties
If you are selling an investment property, most investors are looking for a ready-to-go investment property, so good tenants already in residence makes your property more appealing. Such a scenario also means your tenant will endure minimal disruption as they won’t need to move, and you’ll keep banking rent and covering your mortgage right up until settlement of the sale.
Offering Rent Free Period for Breaking Lease
In addition to conforming to tenancy law, you should also be compassionate about the impact of selling property on the tenants. Remember, it is their home and being on the market has the potential to disrupt their lives in different ways. The more notice and support you can give them, the more accommodating they are likely to be. This is where a respectful, constructive approach from your real estate agent is critical. If the tenants are to stay in the property, they’ll need to adjust their routine around open inspections and property viewings should take place at mutually agreed times.
Minimising Disruptions from Inspections & Viewings
With the house on the market there will need to be times when prospective buyers go through the property to inspect it in person. Specifics around this vary from state to state but landlords always have to give a set period of notice before an inspection, organise the inspections within certain time periods, and can only arrange a set number of inspections per week.
In some states for example, tenants do not have to agree to more than two inspections per week, while in all states a landlord must give anything from 24 hours to 7 days written notice before an inspection will occur.
Remember, selling property with tenants is about being prepared, patient and respectful of tenants.