Under the RTA 2010, when an
owner decided to place the property on the market for sale, a tenant was able
to terminate a fixed-term agreement without compensation to the landlord (even
if the landlord did not intend to sell before the agreement was entered into,
but subsequently decided to do so)
The revised changes to the act this month will allow the tenant to terminate a
fixed term agreement if the landlord notifies them of their intention to sell –
unless the landlord disclosed the proposed sale of the property before entering
into the agreement as required by section 26, then tenants will be unable to
terminate the fixed term agreement.
As a reminder section 26(2) requires a landlord or landlord’s agent to disclose
to a tenant, prior to the tenant entering into a residential tenancy agreement,
any proposal to sell the premises but only if a Contract for Sale has been
prepared.
We recommend that you include as part of your process when signing a new lease
that the question is asked of the landlord if they are considering selling the
premises during the fixed term. In which case it is necessary to disclose this
information to the tenant to ensure that they cannot give notice should the
landlord go ahead with the sale during the fixed term.
Real Plus have added a step on their New Tenancy Procedure template to ensure
this step is added to your new tenancy process and we would suggest you do the
same on your internal checklists and procedures.
Any queries on this don’t hesitate to call us on 02 8355 4999
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