Selling a tenanted property WA owners often assume means getting the tenant out first. It does not. A fixed term lease does not end because the property changes hands, the tenancy simply continues under the new owner on the same terms. The real question is not whether you can sell with a tenant in place. It is whether you should, and that depends entirely on who is likely to buy it.
Does the lease survive the sale?
Yes. A fixed term agreement does not end because the home is sold. The buyer takes the property with the tenancy attached, on the existing terms, for the remainder of the term.
That is a feature, not a problem, if the buyer is an investor. It is an obstacle if the buyer wants to move in.
Who is the likely buyer?
This is the decision, and it should be made before the property is advertised rather than halfway through a campaign.
An investor is buying an income stream. A property with a good tenant, a lease with time left on it and a clean payment history is worth more to them than an empty one, because it produces rent from settlement day and removes the risk of a slow letting.
An owner occupier is buying a home. To them a lease with eight months to run is a reason to look at the next property instead.
Most homes in Perth’s outer suburbs draw both. The honest answer is usually that one group will pay more for this particular property, and the campaign should be built for that group rather than trying to serve both and satisfying neither.
Can the tenancy be ended so the property can be sold empty?
Sometimes, and the rules differ by agreement type.
For a periodic agreement, where the home has been sold and the contract requires vacant premises, the tenancy can be ended on thirty days notice using a Notice of termination, Form 1C.
For a fixed term agreement, the lease does not end on sale. If vacant possession is needed, the owner either has to reach written agreement with the tenant or set the settlement date on or after the end of the fixed term. Consumer Protection puts it plainly: a landlord cannot force a tenant to leave early.
So an owner who signs a contract promising vacant possession in six weeks, with a tenant eight months into a twelve month lease, has made a promise they may not be able to keep. That is a problem worth avoiding at the point the contract is drafted.
What about home opens and inspections?
A tenant in place has a right to reasonable peace and privacy, and that does not stop because the property is on the market.
Written notice is required to hold home opens and to show the property to prospective buyers. Photographs taken to advertise the sale need the tenant’s permission, and they cannot then be used for anything else.
The practical version of this is simpler than the legal version. A tenant who is told early what is happening, given proper notice, and asked rather than instructed will usually cooperate. A tenant who finds out the property is for sale from a sign on the fence will not, and an uncooperative tenant during a campaign costs more than any of this saves.
What a buyer will want to see
If the property is selling with the tenancy in place, have the paperwork ready before the first home open, not after an offer.
The lease and any variations. The rent, the review dates and the date of the last increase. The bond lodgement details. The ledger showing the payment history. The condition report. Anything outstanding on maintenance.
An investor who can see a clean file will move faster and argue less. One who is asked to wait a fortnight for it starts to wonder what is in it.
The short version
The lease survives the sale. A periodic tenancy can be ended on thirty days notice where the home is sold and vacant premises are required. A fixed term tenancy cannot be shortened without the tenant’s written agreement. Notice is required for home opens and buyer inspections, and photographs need permission.
Decide who the buyer is first, then build the campaign around that. Everything else follows from it.
If you are weighing up whether to sell with the lease in place or wait for it to run out, that is worth a conversation before anything is listed. Our residential property sales team looks at the lease, the likely buyer and the timing together, because the answer changes with all three.
These rules come from the Residential Tenancies Act 1987 and the guidance published by Consumer Protection WA. This article is general information and not advice.
