By August 21, 2019Landlords

As a tenant, living in a home that is listed for sale can be inconvenient and at times, distressing.

As a landlord, putting in the planning, forethought and consideration of your tenant’s situation can make it less of a stressful ordeal – for all parties involved. One of the most common questions I receive from tenants is, ‘what happens with my lease if the property is sold?’.

Fortunately for existing tenants, tenancy agreements do not automatically cease when a rental property is sold. For landlords however, this can limit the pool  of potential buyers. If buyers wish to be owner occupiers, they’re likely to want to move in straight away. For this reason, investors often wait until the tenancy agreement is ending before listing the property for sale. However, if you need to sell quickly and have a fixed term tenancy agreement in place, it’s important to abide by the following points to achieve a fair result for both yourself and your tenants.

Listing for Sale

When the property is listed for sale, the tenant must be supplied with a ‘Notice of Lessor’s Intention to Sell Premises’ (Form 10).  This document informs the tenant on how the selling agent plans to market the property. Open homes and onsite auctions can only be held if the tenant agrees in writing.  Similarly, photos of the property can only be taken for marketing purposes if the tenant agrees in writing.

Renewing the Lease

A tenant can give two weeks’ notice to a landlord/property manager if they have just signed a new lease or lease renewal within 2 months of the property being listed for sale.  This is on the basis that the tenant wasn’t given written notice of the proposed sale before entering into the agreement.  If the property is to remain for sale and a new tenancy agreement has been signed, the Form 10 must accompany the new lease agreement.


If the property is sold (hallelujah!), your tenant must be notified in writing so they are aware of the new owners and managing agency, if applicable.  During the sale process, it is best practice to notify the tenants of key days such as unconditional and settlement.  If a buyer is looking to take vacant possession of the property, the seller may agree to give the appropriate notice to a tenant at unconditional date.  If not, the new owner will need to provide notice post settlement once they have the legal authority to do so.  If a lease is periodic at the time of contract, the owner is only required to provide one month’s notice to terminate the lease.  However, if the lease is on a fixed term, the owner will need to provide two months’ notice to coincide with the end of the lease. If both properties agree, you can pursue with a mutual termination of the lease.  The property manager/owner and tenant may agree in writing to end the lease agreement earlier. An early termination may also be negotiated as part of the contract and as such, a clause may be included within the special conditions too.

The chances of success are improved greatly if you and your tenant can work together and consider one another’s needs. Before signing a lease, it’s always recommended to seek independent legal advice. If you start the process off on the right foot, it’s more likely to be a great outcome for all involved.

If tenants and landlords are unsure about their obligations and responsibilities during the sale of a property, visit The Residential Tenancy Authority (RTA) website –

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