Selling With Tenants

Young couple in their new house

 

When a vendor puts their property on the market they more or less work in partnership with their agent to present and market the property for the best price possible.

When the property is occupied by a tenant the sales process may be a little more complicated.

Most tenants are co-operative and very helpful but even the most accommodating tenants can sometimes be tested by the additional demands that come with living in a property that is on the market. 

The law requires that once a property is on the market tenants must allow the marketing agent to show prospective buyers through the property, provided the tenants are given 24 hours notice.

The tenants can take comfort knowing that their fixed term lease cannot be broken. The landlord has no legal right to break the lease, neither does the prospective new owner, but once the lease expires the new owner is not obliged to renew it.

If the new owner intends to occupy the property they must give the tenants no less than 60 days notice to vacate. In some particular circumstances different time frames may apply. Although every property is different, from an ideal marketing perspective, it is better for a house to be on the market without tenants occupying it.

However if you have a tenant with beautiful furniture and the property presents well you may be better off marketing the property with the tenants in it, rather than vacant. The presentation of the property can make a big difference to the price your agent can achieve.

If your property is predominantly land value or requires a major renovation then the presentation may not make much difference to the price you receive.

Many vendors can’t afford to have the property sitting vacant during the sales campaign, because it may take three to four months by the time it settles. So there is a financial advantage in selling with tenants because there is no loss in rental income.

That is why most vendors choose to sell with tenants rather than vacant.

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