Tenant Rights When a Property is Sold

A rental property sold during an existing tenancy can create uncertainty for tenants and new homeowners. Understanding tenant rights when a property is sold and responsibilities of the new owner is crucial to ensure a smooth transition and uphold legal obligations.

If you are a renter whose home just went on the market or a new property owner who just bought a home with a current tenancy, you might wonder, “What happens to tenants when a property is sold in Queensland?”

Keep reading to find out more information based on resources from the Residential Tenancies Authority (RTA) and the Real Estate Institute of Queensland (REIQ).

Tenant rights when a property is sold

Notification of Sale

Tenants must be notified in writing of a Property sale during the tenancy. This notification should outline any changes in property management and include the contact details of the selling agent.

How to handle property inspections during a sale

When a house is for sale the tenant must allow reasonable access to the property for inspections. The RTA specifies that tenants should be given at least 24 hour’s notice and that the visits should be at reasonable times.  We always  work with the tenant to have an Open Home on a Saturday as this ensures less interruption for the tenant and a smoother selling process.

Continuity of Tenancy

If you’re currently renting a property that is on the market, or has recently been sold, you might be wondering “what happens to my lease?”

• If the tenant is on a fixed-term lease, the new owner inherits this lease and must honour its terms until the lease ends. Unless mutually agreed upon, the tenant cannot be asked to vacate the property before the lease expires.
• If the tenant is on a periodic lease, the new owner can provide a notice to leave, which typically requires at least four weeks’ notice, provided it complies with the reasons for ending a tenancy.
• The tenant cannot end the lease because the home is sold/placed on the market unless all parties agree in writing

Rent Payments

• Tenants must continue to pay rent as per the existing lease agreement. Once the property ownership changes, the new owner may wish to change property management companies. If so, the new property management company will contact tenants regarding where and when to pay rent and any other new arrangements.
• New laws limit the frequency of rent increases and the period in which rent cannot be increased does not change when you change owners.

Bond and Condition Reports

The bond remains with the RTA and may be transferred to a new property management company if required. The condition report, completed at the start of the tenancy, remains a critical document in resolving any disputes at the end and will also be transferred.

New homeowner responsibilities

The new homeowner also inherits some responsibilities alongside the existing tenancy. We have outlined these below.

Inheriting the Lease

The new owner must respect the terms of the existing lease agreement, including the rent amount and lease duration.

Notifying the Tenant of Management Change

If property management changes occur, the previous and current management companies must notify the tenants.

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Property Inspections

The new owner has the right to conduct routine inspections but must adhere to the RTA’s notice periods and frequency limits. Tenants must receive at least 1 week’s notice for inspections, which cannot occur less than three months after the last inspection.

Maintenance and Repairs

• The new owner is responsible for keeping the property safe and habitable. This includes addressing any urgent repairs promptly and ensuring regular maintenance is conducted as per the tenancy agreement and outlined in the minimum housing standards.
• The tenants are still responsible for maintaining the property and reporting any issues promptly to the management parties.

Bond Management

Should the property’s managing party change, the new managing party must ensure the bond is correctly transferred to their name with the RTA. Any disputes regarding the bond at the end of the tenancy will be handled based on the condition report and records maintained by both the tenant and the new owner.

Balancing the interests of tenants and new homeowners requires clear communication and adherence to legal obligations. Understanding and respecting each other’s rights and responsibilities can ensure a smooth transition and maintain a positive relationship throughout the tenancy period.

For more detailed information, you can refer to the resources from the RTA here, and the REIQ here.