Selling A Tenanted Property (Vic)
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 Victoria are contained in the Residential Tenancies Act 1997.
Showing the property to a prospective buyer
A lessor or lessor’s agent can enter a premises to show the premises to a prospective buyer. The lessor or agent can do this only if they have given a “notice of intention to sell” form to the tenant at least 14 days before the property is first made available for showing. They must also make all reasonable efforts to ensure the days and times for showing suit the tenant. The tenant must not unreasonably refuse to agree to days and times for showing, but does not need to agree to more than 2 showings a week. If the lessor or lessor’s agent fails to agree on showing times and days, the lessor or lessor’s agent can show the property up to twice a week if they give the tenant at least 48 hours’ notice of each showing.
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. The showing cannot last for more than 1 hour. Compensation equal to half a day’s rent, or $30, whichever is greater, must be paid to the tenant for every showing.
If a tenant is a “protected person” under a family or personal violence intervention order, any showing is to be by appointment only and not via an open home.
The tenant has a right to be at the property when it is shown, or to have a representative there. If a tenant’s property is stolen or damaged during a showing, the tenant can apply to the Victorian Civil and Administrative Tribunal (VCAT) for compensation. The tenant must show that the loss or damage was due to the conduct of the lessor or agent, or another authorised person.
The lessor must take reasonable steps to ensure the tenant has quiet enjoyment of the premises. Additionally, the lessor or 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 or agent. 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 in a “reasonably clean condition” during the tenancy.
When advertising a property, the lessor or agent can access the property to take photos or video of the inside of the property. They must give the tenant at least 7 days’ notice. A tenant lodge a written objection to the taking of photos or video if:
- they would directly identity any tenant;
- they would reveal sensitive information about a tenant;
- they would show something valuable and increase the risk of theft at the home;
- it would be unreasonable for a tenant to remove or conceal items they object to being published.
If a tenant has lodged a written objection, the tenant has a right to review any photos or video taken at the property before the photos or video are published, and written consent must be given to publish them.
If photos or video is published without the tenant’s consent, the tenant can apply to VCAT for an order that the lessor or agent destroy the photo or video, not use the photos or video in advertising, and pay compensation for financial loss suffered as a result of the publishing.
A lessor or agent can conduct or allow an open house at the property. The tenant can object to an open-house showing if they believe it will unreasonably infringe on their right to peace and quiet or place their possessions at risk. If the lessor or agent insists on having an open house, the tenant can apply to VCAT for a restraining order.
Ending the lease
If a tenant receives a “notice of intention to sell”, they can end a fixed-term lease by giving 14 days’ notice. The lease cannot be terminated by the buyer and it continues as it was before the sale.
If a tenant is under a periodic agreement (one which recurs automatically and has no specified end date), they can end the agreement by giving 14 days’ notice.
If the lessor or agent did not disclose the property was under a contract of sale before the tenant signed a lease on the property, the tenant can apply to VCAT for an order to terminate the lease. The tenant can also seek compensation for any costs related to the termination.
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.
For advice or representation in any legal matter, please contact Armstrong Legal.