Selling a tenanted property: what you need to know

Selling a rental property while tenants hold a lease can be tricky. Open inspections, potential buyers driving by, and regular contact from the selling agent to arrange inspections can all significantly disrupt tenants' daily routines.

The rules surrounding the selling of tenanted properties differ slightly between states and territories but suffice to say, a smooth sale process will rely on good communication and respect.

Here are some points to consider:

Notify your tenants

Before you begin the selling process, it’s imperative you notify your tenants that you're planning to sell the property. It’s good practice to provide as much notice as possible. Some state regulations stipulate tenants should receive two weeks' written notice before the property is placed on the market.

There are also rules dictating how much notice tenants are required to have before prospective buyers can inspect the property. It can be up to two weeks' notice before the first inspection while, some states stipulate at least 24- or 48-hours' notice before each inspection. (See more details on individual state and territory requirements below.)

The key here is to communicate with your tenants as early as possible and be open to discussing any of their concerns.

Schedule or move forward routine inspections if possible

Each state and territory has its own regulations surrounding routine inspections, which can generally be conducted once every three or six months, usually with a minimum written notice period of seven days.

It can pay to seek permission to push this forward to allow you to see if there’s any maintenance or cosmetic work that may need to be carried out before the property goes on the market.

It’s worth noting in some states, tenants have the right to refuse to bring inspections forward. In others, inspections can be carried out as long as tenants have been given the required notice period.

Your tenants' lease remains in place

The lease in place for your rental property remains valid even if you choose to put the property on the market. It also remains valid after the sale and the new owner will be required to honour it.

Owners generally can’t terminate a tenancy agreement to facilitate the sale of the property. However, in some cases, the lease can be terminated through mutual agreement.

If the tenant is on a periodic lease, you're entitled to end the lease agreement, but you must provide the legal notice period required in your state or territory, which could be anywhere from 30 to 120 days.

Be respectful of your tenants

Remember your property is your tenants' home. By placing it on the market, it can place their future housing arrangements in jeopardy should it be purchased by an owner occupier.

By understanding and respecting their position, you can contribute to a smooth sale process. Be sure to address any concerns they express and be prepared to compromise if sale arrangements pose reasonable difficulty or inconvenience for them.

The better the relationship between owner and occupant, the more likely tenants will likely be to ensure the property is well looked after and presentable for inspections. Be aware too that a property that already comes with good tenants can be an attractive proposition for potential investors..

Tenants must consent to signage and photography

As a landlord, you can photograph the outside of your investment property without permission, but you’ll need your tenants' consent if you wish to get internal pictures. The selling agent will also need to obtain permission from them before publishing images featuring their possessions and chattels in any marketing material. (This can be legally refused by some tenants fleeing domestic violence situations.)

You’ll also need to get the go-ahead from your tenants before any signage is placed out front of the property. If they don’t want any, they can’t be placed there. They can also refuse for on-site auctions to be conducted on the property.

This is not the case for strata scheme properties, where signage and on-site auctions are permitted without individual tenants' consent.

Tenants can be present during inspections

Tenants have the right to be there during property inspections and, in some jurisdictions, can refuse an open home request under certain circumstances. In many states, the number of inspections may be limited to two a week unless the tenant agrees to more.

Victoria’s tenancy laws also stipulate tenants receive monetary compensation for every sales inspection that takes place, equal to half a day’s rent or $30, whichever is greater.

Again, communication is key. Speak to the selling agent about limiting the number of inspections or scheduling them at convenient times for the tenants. Even though there are rules surrounding home inspections, courtesy also goes a long way.

Consider compensating your tenants for any inconvenience

Although some states will lay down legal compensation requirements, as a landlord, you can choose to go over and above to keep your tenants happy. How you do this is entirely up to you. If you own multiple investment properties, you may offer to rehome your tenants in another of your properties if that's convenient for them.

You could choose to shout them a weekend away while open houses are conducted or reduce their rent. You may waive notice periods if they decide to terminate the lease because they don’t want the disruption that comes with the sale of the property. You might even offer to contribute to their costs associated with moving.

‘Doing the right thing’ may not be what the legal requirements state but it can create a ‘win, win’ vibe for all parties and negate any ill-feeling.

Keep the tenant in the loop

Be sure you keep abreast of whether your tenants are happy with communications with your selling agent. If you manage the investment property yourself, keep them informed of what's happening with the sales process and check in regularly to see how they're being impacted.

If the property is managed through a property manager, get them to inquire on your behalf so that you can address any concerns and ensure your tenants feel they're not being neglected during the sales process.

After the sale

Letting a tenant know you appreciate their understanding and cooperation during the sales process is a noble gesture. You might choose to give them a gift or at least provide them with an excellent reference that they may be able to use when they apply for their next rental property.

State and territory regulations when selling a rental property with tenants

New South Wales

• Written notice
  You must provide at least 30 days' written notice if you wish to terminate the lease at the end of the agreement period, or 14 days' notice before the property is first made available for showing

• Eviction
  No eviction can occur for a fixed lease unless the lease is violated or both parties reach a mutual agreement to terminate the tenancy agreement.

• Notice required for inspections
  At least two weeks' written notice before the first inspection, 48 hours for subsequent inspections (no more than two per week).

• Time restrictions on access
  Inspections should not occur before 8am or after 8pm, on Sundays or public holidays, or be for longer periods than necessary unless tenants consent.

Victoria

• Written notice
  You must provide 60 days' written notice if you don’t wish to renew the tenants' fixed lease at the end of the agreement period, or 14 days' notice before the property is first made available for showing.

• Eviction
  No eviction can occur for a fixed lease unless the lease is violated or both parties reach a mutual agreement.

• Notice required for inspections
  48 hours of notice is required for inspections, with no more than two showings a week.

• Time restrictions on access
  Inspections should not occur before 8am or after 6pm, on Sundays and public holidays, and cannot last more than one hour. Compensation equal to half a day’s rent or $30, whichever is greater, must be paid to the tenant for every showing.

Queensland

• Written notice
  You must provide written notice to tenants of intention to sell as well as four weeks’ notice if termination of the lease is mutual. The property manager/owner must provide the tenant with an official form notifying them of the intention to sell and supply plans of how the property will be marketed.

• Eviction
  No eviction can occur for a fixed lease unless the lease is violated or both parties reach a mutual agreement.

• Notice required for inspections
  Landlords must provide at least 24 hours' notice for both the first and subsequent inspections. An open house or on-site auction can only be held with the written permission of the tenant.

• Time restrictions on access
  Inspections should not occur on Sundays or public holidays, or any other day before 8am or after 6pm unless the tenant agrees. From 1 May 2025, a property manager/owner cannot enter the property more than twice in a seven-day period.

Western Australia

• Written notice
  You must provide written notice of intention to sell to tenants. You can end the tenancy by giving at least 60 days’ written notice.

• Eviction
  No eviction can occur for a fixed lease unless the lease is violated or both parties reach a mutual agreement.

• Notice required and time restrictions for inspections
  “Reasonable notice required” is not defined in WA’s tenancy laws. It is generally taken to be that inspections can occur between 8am to 6pm on weekdays, and 9am to 5 pm on Saturdays, or any other time agreed to by both parties.

South Australia

• Written notice
  You must advise prospective tenants if you intend to sell your rental property within two months of entering a new tenancy agreement, otherwise a tenant may terminate the lease. You must advise the tenant in writing within 14 days of entering into an agreement to sell. The property can’t be advertised or shown to prospective buyers until that time has passed. You can end the tenancy by giving at least 60 days' written notice.

• Eviction
  No eviction can occur for a fixed lease unless the lease is violated or both parties reach a mutual agreement.

• Notice required for inspections
  Must provide at least 14 days' notice before advertising the property for sale and give “reasonable notice” before each inspection. Seven to 14 days' written notice is required for entry to the property for valuation purposes.

• Time restrictions for inspections
  Inspections should occur no more than twice in seven days unless the tenant agrees. These should take place between 8am and 8pm Monday to Saturday for one hour unless the tenant agrees to other arrangements.

Tasmania

• Written notice
  You must provide tenants with written notice of your intention to sell. If you do not wish to extend or renew the lease, a notice to vacate can be issued at least 42 days (but not more than 60 days) before the lease’s end date.

• Eviction
  No eviction can occur for a fixed lease unless the lease is violated or both parties reach a mutual agreement.

• Notice required and time restrictions for inspections
  48 hours' written notice is required for inspections, which can only take place once a day on no more than five days in any week and only between the hours of 8am and 6pm.

Australian Capital Territory

• Written notice
  You must provide written notice to tenants of your intentions to sell the property. A tenant can give 14 days' notice to end the lease if the property is advertised for sale during the first six months of a fixed term lease. You can give eight weeks' notice to end a fixed term lease if you intend to sell the property.

• Eviction
  No eviction can occur for a fixed lease unless the lease is violated or both parties reach a mutual agreement.

• Notice required for inspections
  You must provide 48 hours' notice before inspections. Tenants can refuse access if they were not previously informed of the sale.

• Time restrictions for inspections
  Inspections should take place between 8am and 6 pm, not on Sundays or public holidays, unless agreed to by the tenant.

Northern Territory

• Written notice
  You must provide written notice to tenants of your intention to sell. 14 days' notice is required to terminate a fixed lease at the end of its term, or 42 days' notice for a periodic lease.

• Eviction
  No eviction can occur for a fixed lease unless the lease is violated or both parties reach a mutual agreement.

• Notice required for inspections:
  At least 24 hours written or oral notice for “a reasonable number of inspections” between 7am and 9pm. A tenant cannot unreasonably impede lawful entry in attempts to sell a property, while landlords should be sensitive to inconveniences to tenants.

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