What happens when a rental property is sold?

There are a lot of moving parts when a rental property is up for sale, so we’ve answered your top frequently asked questions (FAQs) to help explain your rights and responsibilities under the Residential Tenancies and Rooming Accommodation Act 2008
 

1. How does selling a rental property affect the tenancy?  

A tenancy agreement doesn’t automatically end when a rental property is sold.  

If it’s a fixed-term agreement, the existing property manager/owner and buyer must honour the agreement unless otherwise negotiated. In some instances, the buyer may request to end the tenancy early in exchange for some form of compensation to the tenant. However, if the tenant wants to stay in the property until the end of their fixed-term agreement, they do not have to agree and are entitled to stay in the property until the end of the tenancy.   

If it’s a periodic agreement, currently if the buyer requests vacant possession of the property as a condition of sale, the property manager/owner must provide the tenant with a Notice to leave (Form 12) for general tenancies, or Notice to leave (Form R12) for rooming accommodation, which allows a minimum of four weeks’ notice after the contract of sale is signed.  

From 1 October 2022, legislative changes come into effect around ending a tenancy. From this date, property managers/owners can end a periodic tenancy on the grounds of preparing the property for sale or if vacant possession is a condition of sale. The property manager/owner will need to provide the tenant with a Notice to leave (Form 12) for general tenancies, or Notice to leave (Form R12) for rooming accommodation, with a minimum of two months’ notice. Find out more about the legislation changes around ending a tenancy on our rental law changes page.
 

2. What does the sale process look like? 

The property manager/owner must provide the tenant with a Notice of lessor's intention to sell premises (Form 10), which includes the sale strategy. 

The property manager/own may also request to take photographs of the property for advertising purposes, and request to organise inspection times.  

The RTA recommends working together to develop an approach that works for both parties, while limiting intrusion on the tenant’s right to quiet enjoyment.
 

3. What if the tenant only just signed the lease? 

If the property is advertised for sale within two months of the lease agreement being signed or renewed, and the tenant wasn’t provided written notice that the property would be advertised for sale, they can choose to end the agreement without penalty. 

To end the agreement, the tenant needs to provide the property manager/owner with a Notice of intention to leave (Form 13) with two weeks' notice, within two months and two weeks of the start of the tenancy.
 

4. Can photos be taken during tenancy for advertising purposes? 

It’s standard practice to include images of the property to help drive interest from prospective buyers.   

The property manager/owner must get written permission from the tenant to use photos of their possessions in any advertising, both inside and outside of the property.  

Advertising a property using photos without a tenant’s permission is an offence. 

For more information, see our article on Taking photos in a rental property.
 

5. How do inspections work? 

It’s also standard practice to provide prospective buyers with opportunities to inspect the property. 

The property manager/owner can request to hold an open house, but this can only occur if the tenant agrees in writing and, unless the tenants agrees, cannot be held on: 

  • Sundays or public holidays  
  • any other day before 8am or after 6pm.  

Open houses allow multiple buyers to inspect the property at once, and can reduce the amount of (or need for) individual inspections.  

If the tenant does not agree to an open house, the property manager/owner can arrange an individual inspection so long as they provide the tenant an Entry notice (Form 9) with at least 24 hours' notice. In respect to the tenant’s quiet enjoyment, the property manager/owner can only arrange additional inspections after a reasonable amount of time has lapsed since the last inspection.
 

6. Can the buyer increase the rent? 

Unless there are special terms in the existing tenancy agreement that outline terms for a rent increase, the same rules and timeframes concerning rent increases apply.  

Rent for fixed-term agreements cannot be increased unless it is stated in the tenancy agreement and all of the following occurs: 

  • the agreement states the rent will be increased 
  • the agreement states the new amount (or how it will be worked out) 
  • the property manager/owner gives the tenant at least two months' notice in writing, and 
  • it has been at least six months since the tenancy started or since the last increase. 

Rent for periodic agreements can only be increased if the property manager/owner gives the tenant at least two months' notice in writing and it has been at least six months since the last rent increase, or since the tenancy started.
 

7. What happens if parties can’t reach an agreement throughout the process? 

Where possible, we recommend parties communicate with each other directly in the first instance.  

If you’re unable to reach an agreement through self-resolution, you can apply for free dispute resolution with the RTA.  

If you’re still unable to reach an agreement through dispute resolution, you may be able to apply to the Queensland Civil and Administrative Tribunal (QCAT) for a decision.
 

Additional resources 

For more information, check out our:  

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