When you purchase a house with tenants, the current landlord must inform the tenants in writing within 14 days of entering into a sales agreement. This notification is crucial because it provides tenants with sufficient time to prepare for potential changes. Importantly, the property cannot be advertised or shown to prospective buyers until the tenant has been informed.
If a contract of sale is signed, the landlord must notify the tenant of the buyer’s name and the date from which rent should be paid to the new owner. This written notice must be provided at least 14 days before the settlement date or as soon as possible if the settlement period is shorter.
What to expect
When planning to purchase a house with existing tenants, it’s vital to be aware of the rules surrounding open inspections and advertising. Tenants must be given adequate notice for open inspections, and their consent is required before placing for sale signs on the property or taking photographs that include their personal belongings. Clear communication with the tenants will help maintain a positive relationship during the selling process.
Tenant rights when you purchase a house with a Fixed-Term or Periodic Lease active
Upon purchasing a property, the rights of tenants vary depending on whether they are under a fixed-term or periodic lease:
- Fixed-Term Lease: Tenants have the legal right to remain in the property until the end of their lease agreement. The new owner must honor this lease unless specific termination clauses apply. If the new owner wishes for the tenant to vacate earlier, they must negotiate with the tenant.
- Periodic Lease: If the sale of the property requires vacant possession, the landlord must provide at least 60 days’ written notice to end a periodic lease agreement. This notice period allows tenants to make necessary arrangements for relocation.
Finalising the sale
Once the sale is finalised, and ownership is transferred, the tenant must be informed of when they should begin paying rent to the new landlord. It’s the responsibility of the new owner to ensure all the legal requirements are met, and tenant rights are upheld throughout this process.Purchasing a house with tenants involves specific legalities that must be followed to protect both the tenant’s and landlord’s rights.
For more detailed information on the regulations, you can refer to Consumer and Business Services website. Additionally, if you need personalised advice or assistance in managing your investment property, don’t hesitate to contact our friendly team for expert guidance tailored to your needs.