Selling a rental property can feel overwhelming for both rental providers and renters, especially with the ongoing changes to Victorian rental legislation. Understanding the rights and responsibilities of each party can help ensure the process runs smoothly, respectfully and in line with the law.
Whether you are considering selling an investment property or are currently renting a home that is being placed on the market, here is an overview of what you need to know.
Can a Rental Property Be Sold During a Tenancy?
Yes. In Victoria, a rental property can be sold while it is tenanted. A renter does not need to vacate simply because the property is being sold.
In many cases, the tenancy will continue with the purchaser taking over as the new rental provider once settlement occurs. This is often referred to as purchasing the property “subject to the tenancy”.
However, there are also situations where an owner may wish to sell the property with vacant possession.
Rights and Responsibilities of Rental Providers
Access for Sales Inspections
Rental providers and agents are permitted to conduct sales inspections while a property is tenanted, however strict rules apply.
Rental providers must:
• Provide renters with at least 48 hours written notice before each inspection
• Conduct inspections between 8am and 6pm and not on public holidays unless agreed otherwise
• Make reasonable efforts to agree on inspection times with the renter
• Ensure inspections are conducted reasonably and respectfully
Open for inspections can generally only occur twice per week for no longer than 1 hour each time.
Compensation for Sales Inspections
Under Victorian legislation, renters may be entitled to compensation if the property is sold and sales inspections are conducted.
A renter can request compensation equivalent to half a day’s rent or $30, whichever is greater, for each sales inspection where they have been required to make the property available.
Notice to Vacate for Sale
If a rental provider intends to sell the property with vacant possession, they may issue a Notice to Vacate for sale of the property.
To do this:
• The property must genuinely be for sale
• Supporting documentation must be provided, such as a signed sales authority
• The required notice period must be given in accordance with current legislation, which is 90 days minimum notice.
Importantly, a Notice to Vacate for sale can still be issued if the renter has a fixed term lease agreement still in place, however the vacate date must be after the lease expiry date.
Maintaining the Property During the Sale
Rental providers must continue meeting all maintenance and repair obligations throughout the sales campaign and tenancy period. Selling the property does not remove these responsibilities.
Rights and Responsibilities of Renters
Quiet Enjoyment
Renters are entitled to “quiet enjoyment” of the property, even while it is being marketed for sale.
This means renters have the right to:
• Reasonable privacy
• Proper notice before inspections
• Fair and respectful treatment throughout the sales process
Keeping the Property Presentable
While renters are not expected to maintain display-home presentation standards, they are still required to keep the property reasonably clean and allow lawful access for inspections.
Cooperation between renters and agents often leads to a smoother and more successful campaign.
Refusing Improper Entry
Renters can refuse entry if proper notice has not been provided or if inspection requests are excessive or unreasonable.
Ending the Lease Early
In some situations, can vacate early after a property is listed for sale depending on the conditions of the Rental Agreement and Disclosure Statement. You should speak to your Property Manager. This can sometimes be negotiated by mutual agreement between the parties.
Final Thoughts
Selling a rental property does not need to become a stressful experience. With clear communication, respect and a sound understanding of Victorian rental laws, both rental providers and renters can work together to achieve a positive outcome.
If you are considering selling your investment property or would like advice regarding your rights and obligations during a tenancy, our team would be happy to assist.