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Yes, you can sell your investment property with tenants in Victoria, Australia, but there are specific legal requirements and considerations you must follow to ensure the sale complies with Victorian tenancy laws. Here’s what you need to know:
1. Understand the Lease Agreement
– Fixed-Term Lease: If tenants are on a fixed-term lease, the buyer must honour the lease. The tenant has the right to stay until the lease expires, even if the property changes ownership.
– Periodic Lease (Month-to-Month): If the tenants are on a periodic lease, the new owner can request vacant possession (if they intend to live in the property), provided the correct notice is given.
2. Notifying Tenants
– You are required to inform your tenants if you plan to sell the property. While there’s no specific timeframe for notification, tenants must be given reasonable notice of any sale-related activities (e.g., inspections or valuations).
3. Providing Notice for Vacant Possession
If the buyer wants the property vacant (e.g., they plan to live there), you must follow the rules under the Residential Tenancies Act 1997 (Victoria):
– 60 Days’ Notice: You must provide at least 60 days’ written notice to tenants to vacate due to the sale of the property.
– The notice can only be given after a contract of sale has been signed and made unconditional.
4. Tenant Rights During the Sale Process
– Quiet Enjoyment: Tenants have the right to live in the property without undue disturbance.
– Notice for Inspections: You must provide tenants with:
– At least 24 hours’ written notice before each inspection.
– Inspections must occur at a reasonable time (not on public holidays or Sundays unless agreed).
– You cannot hold inspections more than twice a week without tenant consent.
5. Marketing the Property
– If tenants are in place, the property can be marketed as:
– An Investment Opportunity: Highlight the rental income and established tenancy to attract investors.
– Vacant Possession: If targeting owner-occupiers, work with tenants to arrange vacant possession before settlement.
6. Selling with Tenants In Place
– If you’re selling to an investor, the lease will transfer to the new owner along with the property. The tenant’s bond and lease terms remain unchanged.
7. Benefits and Challenges
Benefits:
– Appeals to Investors: Tenanted properties can attract buyers looking for rental income.
– Rental Income Continuity: You continue to receive rent until settlement.
Challenges:
– Smaller Buyer Pool: Owner-occupiers may prefer vacant possession.
– Potential Tenant Resistance: Tenants may not fully cooperate with inspections or property presentation.
Key Tips for Selling in Victoria
1. Open Communication: Keep tenants informed and maintain a good relationship to facilitate the sale process.
2. Legal Advice: Consult a real estate professional to ensure compliance with Victorian tenancy laws.
If you are looking for an experienced and professional conveyancer, Red Door Conveyancing is the best choice for you. You may call us on 03 8456 6797 for more information.
