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Sale of Premises
You wake up to find a for sale sign out the front of your home.
Don't panic! it may not be as bad as it seems...
Can the landlord sell my home?
Yes, your landlord can sell your home. The law doesn't impose limits on a landlord's ability to dispose of their property. However, aspects of selling tenanted properties are regulated by the standard tenancy terms in the Standard Lease and by the Residential Tenancies Act 1997 (RTA). You do not have to allow unlimited access to prospective purchasers, and you may not have to move.
Can another agent manage the sale?
Yes, in fact the landlord may decide to have a few agents. However, the law will apply no matter how many agents there are, it just means that you may have to write to 2 or 3 agents rather than just one. If the number of agents is excessive, you may have a basis for a complaint regarding interference with your peace, comfort or privacy (see below).
Notice of intention to sell
The ‘standard terms’ are part of the RTA and form the basis of your agreement. They set out general access guidelines. They specify that the landlord (or their agent) cannot enter your home except in accordance with the guidelines.
Clause 81 talks specifically about access for interested or potential purchasers. It stipulates that access is only possible if the landlord intends to sell the premises and you have been previously notified in writing of their intention to sell.
If you have not received notice in writing you are able to refuse access until the written notice is received.
Once notice has been received, you must permit reasonable access, if the landlord or agent has given you 24 hours notice.
What is reasonable access?
There is no precise definition of reasonable access because there are so many variables. What is reasonable will depend on individual circumstances. The standard terms provide a basis to work from. Clause 76 limits access. It says the landlord or agent shall not have access:
(a) On Sundays;
(b) On public holidays; or
(c) Before 8.00am or after 6.00pm,
unless there are urgent repairs, health or safety issues, or the tenant consents. So, you can consent to this access but you are fully entitled to refuse it. The landlord or agent cannot demand access on these days or at these times.
Additionally, Clause 52 states that the landlord
... shall not cause or permit any interference with the reasonable peace, comfort or privacy of the tenant….
This clause puts an important restriction on the access that the landlord or agent is entitled to. While the law requires a tenant to allow access, at some point this access might breach Clause 52, and the tenant would then be entitled to refuse to allow it.
Open house inspections
Many selling agents recommend open house inspections to their clients (i.e. property owners). Often they tell tenants that an open house is necessary and that it is normal practice. Tenants should be mindful that the limits to reasonable access still apply.
There are risks in allowing this type of access. The most obvious is the security implication of having a large number of strangers enter your home, with the opportunity to see your belongings and possibly check for valuables and determine security flaws. There is no way that your ongoing security can be guaranteed. Similarly you have little recourse if there is damage to your property or the premises because you have permitted the access.
These may be risks that an owner occupier or the owner of a vacant property is willing to take, but it is not something a tenant just has to accept, as it obviously impacts upon your peace, comfort, security and privacy.
You are within your rights as a tenant to negotiate set times for individuals who have shown enough interest to make an appointment (inspection by appointment) to view the premises. If the landlord or selling owner persists and demands further access beyond what you consider reasonable, then they can make an application to the ACT Civil and Administrative Tribunal (ACAT) to be given further access.
ALWAYS REMEMBER that under Clause 53 you, as the tenant, have the right to exclusive possession of the premises during the tenancy, and under Clause 75 the landlord or agent can only require access that you allow or ACAT orders.
Negotiate an agreement
Once you receive written notice of the sale, it’s time to think about what you think is reasonable access. In deciding this, take into account that the landlord ultimately has the right to show their property. You cannot refuse all access. It’s about balancing the rights of both parties (see Tenancy Factsheet Access and Privacy).
Be precise. Make it clear if certain days are out of the question; or if you should be present when your home is shown; or if you are going to be away for a period and aren’t willing to allow access during that time.
Get it in writing!
Set down your proposal for access in writing (sign, date and keep a copy), refer to the relevant clauses and request confirmation in writing. If you only receive verbal contact, write again confirming the agreed details.
Preparing the premises for access
Your obligations under Clause 63(c) are:
...to take reasonable care of the premises and their contents and keep them reasonably clean, having regard to their condition at the commencement of the tenancy and the normal incidents of living.
No where in the RTA does it say that the tenant has to clean the premises to showroom standard.
What if they access without permission?
This is a breach of your agreement. Depending on the seriousness you should write to the landlord/agent (sign, date and keep a copy) advising that such access is a breach and must not be repeated or you will go to ACAT. You are able to apply to the Tribunal for an order restricting access or even, in extreme cases, terminating the tenancy.
Can the landlord evict me if they want to sell my home?
Fixed Term Agreement
If you are in a fixed term agreement the landlord cannot evict you. Like you, they are committed to the agreement.
If your agreement is periodic, the landlord is able to issue a notice to vacate under clause 96(1)(d) giving you 8 weeks notice to move. If you are unable to do so the landlord must seek an order from the tribunal. Only the Tribunal can order an eviction (see Tenancy Factsheet: Eviction in the ACT).
NOTE: A landlord will not always want you to move out, because rented properties often attract investors.
What if I want to move out when my home is put on the market?
Fixed Term Agreement
Sale of the property is not a ground for a tenant to terminate a fixed term agreement.
If you are in a fixed term tenancy, you are still bound by that term. Your only option is to try to negotiate a mutual termination, suggesting to the landlord that they may have a better chance at sale if they can advertise vacant possession. However, the landlord can simply refuse.
If you move out without the landlord’s consent to a termination, you will be breaking the agreement. You can apply to ACAT for a termination order if you have grounds to terminate (see Tenancy Factsheet: Ending a Tenancy & Breaking a Lease).
If you are in a periodic tenancy you are able to terminate by giving 3 weeks notice under Clause 88.
What happens if the property is sold?
The buyer becomes the new landlord. There is no change to the terms of your agreement, and it is not a trigger for a rent increase or a change to a new fixed term. You just pay rent to a different landlord, possibly also using a different method of payment.
Can the new owner end my tenancy?
The new owner has no new right to terminate your agreement that the old owner didn’t already have. If you are in a fixed term, the new owner is bound by that fixed term. If your tenancy is periodic, the new owner can give notice under Clause 94 or 96 of the Standard Terms. (See Tenancy Factsheet: Eviction in the ACT.)
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