Selling Tenanted Property (WA)
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 Western Australia are contained in the Residential Tenancies Act 1987. They are administered by the Consumer Protection division of the Department of Mines, Industry Regulation and Safety.
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. They can show the property to a prospective buyer at “any reasonable time, on a reasonable number of occasions, after giving reasonable notice in writing to the tenant”.
“Reasonable time” means between 8am and 6pm weekdays, 9am to 5pm Saturdays, and any other time agreed on by both parties. “Reasonable notice” is not defined in the Act so it is open to the lessor or agent and the tenant to negotiate an agreement. This could include the tenants nominating a suitable notice period, the parties agreeing that the property will be open for inspection at a certain time each week or fortnight for a specified period, or that the tenant’s rent will be reduced to compensate for the inconvenience of having to make the property available for inspection.
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 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 reasonable state of cleanliness 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. A tenant can object if the photos or videos would show something valuable and increase the risk of theft at the home, and should be given a chance to move the valuable items out of the camera view.
Ending the lease
A lease cannot be terminated by the buyer and it continues as it was before the sale. If the lessor or agent wants to sell the property with vacant possession, they cannot do this without agreement from the tenant. This agreement may include compensation for the tenant for the inconvenience of having to move out.
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 21 days’ notice. The lessor or agent can end the agreement by giving the tenant 60 days’ notice.
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.