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?
No, rent cannot be increased unless it has been at least 12 months since the current amount of rent became payable by the tenant.
A change of property manager or owner does not impact the 12-month rent increase frequency limit.
More frequent rent increases written into tenancy agreements prior to 1 July 2023 do not apply.
Example: New tenants move into a rental property in February 2023 on a six-month lease. In April 2023, the property is sold to a new owner. In August 2023, the tenants and the new owner agree to renew the lease for another six months. The owner cannot increase the rent as part of this agreement as the rent cannot be increased until February 2024.
Changes to limit rent increase frequency to once every 12 months came into effect for all new and existing tenancies on 1 July 2023. Visit the rent increase frequency changes webpage for more information.
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:
Note: While the RTA makes every reasonable effort to ensure that information on this website is accurate at the time of publication, changes in circumstances after publication may impact on the accuracy of material. This disclaimer is in addition to and does not limit the application of the Residential Tenancies Authority website disclaimer.