Selling A Tenanted Property (ACT)
If a tenanted property is sold, the buyer must honour any tenancy agreement in place. Laws which govern the sale of a tenanted property in the Australian Capital Territory are contained in the Residential Tenancies Act 1997.
Showing the property to a prospective buyer
The lessor or lessor’s agent must notify the tenant in writing that the property is to be placed on the market. The Act allows a lessor or lessor’s agent to enter a premises to show the premises to a prospective buyer. The lessor or agent can do this only if they have given 48 hours’ notice to the tenant, and only two inspections by prospective buyers per week are allowed.
Entry must be made at a reasonable time, and unless the tenant agrees, not on a Sunday or public holiday, or between 6pm and 8am. An inspection must take place at an agreed time that considers the work and other commitments of both the tenant and the lessor or agent. If the tenant disagrees with a proposed time, the lessor or agent is not permitted to use their key to enter the property. If there is a dispute, either party can apply to the ACT Civil and Administrative Tribunal (ACAT) for an order about when an inspection should be held.
The Act requires the lessor to take reasonable steps to ensure the tenant has quiet enjoyment of the premises. Additionally, the lessor or lessor’s agent must not interfere with the reasonable peace, comfort or privacy of the tenant using the premises. If the tenant feels the process of showing potential buyers through the premises is infringing their rights, they can issue a breach to the lessor. This is why communication and negotiation are important to minimise inconvenience to all parties, and why an agent should limit inspections to qualified buyers only.
As for the condition of the property during a showing, the property must be kept “reasonably clean” during the tenancy.
Notice to leave
If a tenant is under a periodic agreement (one which recurs automatically and has no specified end date), the tenant can end the agreement by giving 3 weeks’ notice.
A tenant can give 14 days’ notice to end a fixed-term agreement if during the first 6 months of the tenancy the property is advertised for sale, or if the property is on the market for a considerable time and the lessor or agent wants access for more than 8 weeks to conduct inspections.
A lessor or agent can give 8 weeks’ notice to end a fixed-term agreement if they intend to sell the property. After receiving such notice, the tenant can give notice to end the agreement with 3 weeks’ notice during that 8-week period. A tenant can apply to ACT for compensation.
Once the property is sold
The tenant should be given a written notice that states the buyer’s name and address and direct the tenant to make all future rent payments to the buyer or buyer’s agent.
For advice or representation in any legal matter, please contact Armstrong Legal.