I wouldn’t purport to provide an opinion on whether or not you should sell your residential property with or without a sitting tenant (I will leave that to the real estate agent you have appointed to sell your house). However, if you make a decision to sell without your current tenant you really need to ensure that you take the right actions from the commencement of the conveyancing process to ensure you get the desired outcome.
There are a number of notice periods that you as the vendor must provide to the tenant if you would like to have access to the property to show prospective purchasers. Initially, you must provide at least 14 days notice prior to the first open home. This notice should be in writing.
You are only allowed to have a maximum of two open homes per week.
As for the times of the open house, it will need to be as agreed with the tenant otherwise 48 hours notice is required each time. As a landlord, you also need to make all reasonable efforts to agree with the tenant as to a convenient time for the open home. If prospective buyers then would like additional inspections for e.g. a building and pest inspection or a valuation there are no laws around the frequency of these visits, and normal access rules apply.
As for how a property is to be presented, it is worthwhile considering whether you would like to give the tenants a rent reduction while the house/unit is on the market. This may assist with presentation, otherwise they only need to keep it in a reasonable state of cleanliness.
Fixed term leases vs rolling leases
Once you give the tenants notice of your intention to sell the property, you need to be aware that if your tenants are in a fixed term lease then they can leave with 14 days written notice without the need to pay for compensation. However, if your tenants wish to stay (as permitted by law), then you must only sell the property “Subject to existing tenancies”. Of course, this may have implications as to the pool of buyers likely to buy your property.
If a rolling lease arrangement is in place, then the Tenant can provide the usual 21 day notice period (again without compensation). Also, if your purchaser requires vacant possession then this can be given with 30 days written notice. It is essential that if this is the case then you address this matter quickly after exchange of contracts as it can cause many issues with settlement if not attended to promptly (or if you decide on a shorter than standard 6 week settlement period).
As part of the conveyancing process, the lease should be attached to the contract for sale. This ensures that the terms are clear to any prospective purchaser. The purchaser will be able to determine the rent and other important commercial terms such as the length of the term of the lease and the condition that the tenant is required to leave the property in on completion.
The above is only general information for vendors and purchasers in New South Wales. If you would like more specific advice that may be more relevant to your circumstances, give us a call and one of the property lawyers here at ClickLaw will be delighted to assist.