SELLING AN INVESTMENT WITH TENANTS

Selling an investment property with tenants in place often makes financial sense for investors. Timing the sale to ensure investors are selling at the right time is important, but also having the consistency of the rental income right up until the sale can make a big difference to financial stability. 

Having tenants in the property can add a level of complication for all parties so it is imperative to follow legislation and work with the tenants for a happy, stress-free sale. 

LANDLORD FAQS

Can I sell with a lease in place?

Absolutely! Before you begin the sale process, you must notify your tenants through the Form 10 Notice of Intention to Sell. You and your tenants are protected by the General Tenancy Agreement in place from a legal standpoint. Open communication with your tenants is key to a less complicated sale. 

How often can I hold Inspections?

Legislation stipulates tenants must have written notice with a minimum of 24 hours before the property will be shown to a potential buyer. But keep in mind you cannot interfere with the tenants right to peaceful enjoyment of the property, so having your agent sit with you and work out an Inspection Plan with your tenants goes a long way!

If it sells can I evict the tenants early? 

If your tenants are on a fixed lease, you cannot ask them to vacate the property unless they break the terms of the lease. You can ask them to leave if they're on a periodic lease agreement with 1-month notice from the contract of sale in QLD if vacant possession is required. 

Can't they leave early if I want them to?

There are benefits and incentives that can be offered to tenants in hopes of reaching a mutual agreement of early termination. You can consider the possibility of offering assistance in moving costs to help smooth the negotiations and can lead to a higher success rate of acceptance. 

Won't a tenanted property deter buyers? 

Selling a tenanted property can come with risks of deterring owner-occupier buyers who wish to occupy the property immediately, but it is also an incentive that attracts investors for a more secure investment with good tenants already in place at the time of purchase as it can assist in securing investment only loans. Ensure you assess the calibre of your tenants and presentation of the property when making your decision to sell with tenants. 

TENANT FAQS

 Can a landlord really sell while I live here? 

A landlord has the right to sell their investment at any time. However, they must issue you a Form 10 Notice of Intention to Sell prior to going to the sale market. 

Can I decline inspections while I live here? 

Current legislation outlines that an agent/landlord has the right to hold inspections for the purpose of sale as long as the correct written notice is given with a minimum of 24 hours from showing a potential buyer through. They, however, must also protect your right to peaceful enjoyment of the property. So the key between all parties is to keep open communication around inspections. Talking directly with the selling agent to pre-schedule inspections so you know when to expect attendance is a great way to stay in control of interruptions to your home. 

If the property sells can I be evicted? 

If you are on a fixed lease, you cannot be asked to vacate early unless you are willing to come to a mutual agreement around breaking the terms of the lease with the landlord. An agent/landlord can give a notice to vacate at the end of your agreement under the 60-day minimum required notice if you are on a Fixed Term. If you are on a periodic agreement an agent/landlord can give 30 days' notice to vacate at the contract of sale. 

Do I have to leave if it sells?

If the property sells to an owner-occupier and the correct notice is given then you must vacate the property by the outlined date. An investment property, however, may sell to another investor which means the chances of remaining in the premises is more likely as they would retain a tenancy in the property that is meeting the expectations of an investor. In order to ensure that you can remain in a property after the sale to an investor keeping open communication, a well presented home and staying on top of your rent payments will all be viewed as favourable by the new owner.