What Happens To The Tenancy Agreement When A Property Is Listed For Sale

A tenancy agreement does not automatically end when a rental property is listed for sale or has sold. The purchaser will take on any agreement in place prior to taking ownership unless the there is a mutual agreement between the tenant and/or seller and/or purchaser to end the agreement. 

Selling the property

 

• The property manager/owner must give the tenant a Notice of lessor's intention to sell premises (Form 10), which includes how they plan to market the property.
• If the selling agent is different from the property manager, the selling agent must give the property manager a copy of each Entry notice before entering the property.
• An open house or on-site auction can only be held if the tenant agrees in writing.
• The property manager/owner must ensure the tenant has quiet enjoyment of the property.

 

Once the property is sold

An attornment notice (i.e. a letter) must be given to the tenant advising them of the new property owner, the new owner’s details and where to pay rent.

Fixed term agreements

If the tenant is on a fixed term agreement, the property manager/owner cannot make them leave because they decide to sell. The tenant can stay until the end of their fixed term, and the new owner will become their property owner. Sometimes a property manager/owner will negotiate with a tenant to end the agreement early and offer some form of compensation.

Periodic agreements

If the tenant is on a periodic agreement, and the purchaser does not want to continue renting the property (i.e. they want vacant possession of the property), the property manager/owner must give the tenant a Notice to leave (Form 12) or Notice to leave (Form R12) for rooming accommodation, that must allow at least 2 months notice after the contract of sale is signed.

Tenant has just moved in or signed a new agreement

If the property is advertised for sale or the property manager/owner enters to show the property to a prospective buyer during the first 2 months of an agreement (including a new agreement), and the tenant was not given written notice of the proposed sale before entering into the agreement, the tenant can end the agreement by giving a Notice of intention to leave (Form 13) with 2 weeks notice.

The tenant must give the property manager/owner the notice within 2 months and 2 weeks of the start of the tenancy.

 

 

 

Disclaimer: This blog post is not to be considered legal advice. If you are seeking specific legal advice we suggest that you consult a legal professional before making any significant decisions in this regard.

References: When a property is for sale | Residential Tenancies Authority (rta.qld.gov.au)