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Under the hammer

Aug 2015

The RTA often receives calls from tenants when they learn their rental property is up for sale.

This can be a difficult time for tenants as they have called it their home for the duration of the tenancy and let’s face it – no one likes moving!

But knowing your rights and responsibilities and having good communication with the property owner or agent can help everyone involved in the process:

  • the tenant to have their property and privacy respected and not be intruded on unnecessarily
  • the selling agent to be able to show the home to prospective buyers without hassle.

Viewing times

The tenant and owner/agent may wish to agree on regular viewing times that suit them. Agreeing to regular time slots may reduce the number of ‘ad hoc’ or single inspections which would minimise the disruption to the tenant.

Holding an open house without the tenant’s written permission is an offence under the Act. Owners/agents should negotiate a suitable time for the open house with the tenant, remembering it is their responsibility to minimise disruption of the tenant’s quiet enjoyment of the property.

The owner/agent must give notice prior to entering for an inspection using an Entry notice (Form 9). Entry for inspections can occur anytime between 8am to 6pm and not on a Sunday or public holiday unless the tenant agrees.

If the tenant does not agree to an open house, the selling agent is still able to give an Entry notice to show a prospective purchaser the property.

The minimum notice period is 24 hours.

Photos

Agents are allowed to take photographs but they must get the tenant’s permission to take photographs of their possessions (like internal photos which show the tenant’s furniture). It is an offence to use photos of the tenant's personal belongings in advertisements unless they give prior written consent.

The maximum penalty is 20 penalty units – section 203 of the Residential Tenancies and Rooming Accommodation Act 2008 (the Act).

Special terms

The RTA does not support the use of special terms that require the tenant’s written approval of open houses and photographs as a condition of the tenancy.

Including these special terms in a tenancy agreement would be considered contracting outside the Act, with a maximum penalty of 50 penalty units.

The RTA investigates complaints received about special terms that potentially breach section 53 of the Act and successfully undertook compliance activity against an agent in 2013 around offences related to open houses and photography special terms.

Tenants rights during an inspection or open house

The tenant has the right to remain in the property during an inspection or open house. This is also applicable to real estate agents who need to appraise a property for valuation and listing purposes and requires the agent to give an Entry notice (at least 24 hours notice).

What happens if the property is sold?

A tenancy agreement does not automatically end when the property is sold. The purchaser takes on any agreement in place prior to taking ownership. An attornment notice (i.e. a letter) must be given to the tenant advising them of the new landlord, their details and where to pay rent. A Change of lessor, agent or manager/provider (Form 5) is given to the RTA for the bond.

If the purchaser requires vacant possession of the property and the tenant is on a periodic agreement, the owner/agent can give the tenant a Notice to leave (Form 12) with 4 weeks notice.

If a fixed term agreement is in place the owner/agent and tenant may agree (in writing) to end the agreement early (this may include compensation for the tenant).

If the tenant is on a fixed term agreement and does not wish to move, they can stay until the end of the fixed term and the purchaser becomes the landlord. Remember, the property manager or owner must still end the agreement by issuing a Notice to leave without grounds with 2 months notice.