It can come as a bit of a shock when your landlord decides to sell your much-loved 'home'. Naturally, this situation can raise several questions: Do you need to search for a new rental? Are you obligated to keep the property in pristine condition for open homes? What happens when the property is sold?
Your landlord is legally permitted to sell their property at any time; however, they are still governed by several provisions designed to protect tenants. Let's take a look at what happens when a tenanted rental property is sold in New Zealand.
Can your landlord sell your rental property?
In New Zealand, landlords are allowed to sell their property at any time. The good news is that if you have a current fixed-term tenancy agreement, you cannot be asked to leave before the tenancy expires. When the property is sold, it is sold with you, the tenant, in place. You will be notified that the property ownership has changed.
There are many benefits for an owner to sell a tenanted property, particularly as it provides consistent income right up until the property is sold.
Do I have to agree to viewings and open homes?
In New Zealand, while landlords have the right to access their premises to show prospective buyers, they must provide written notice at least 48 hours before each viewing. You are obliged to make all reasonable efforts to agree on a suitable time and day for the showing. If you agree, make sure you get it in writing, signed by both yourself and the landlord or agent.
If an agreement isn’t reached, the landlord is limited to showing the property a maximum of twice per week, with at least 48 hours’ notice each time. Notice can be delivered by email (if you agree to this communication method), mail, or handed to you between 8 am and 7 pm. You are obliged to keep the premises in a "reasonable state of cleanliness".
If the landlord has given you notice within the correct timeframe, they have the right to show people through the premises, whether or not you agree or are present. However, you do have the right to be at the premises during inspections or have someone else there on your behalf.
It’s a good idea to discuss suitable viewing times with your property owner or property manager and adhere to that routine each week. This way, everyone knows what to expect and when.
Are there any benefits to tenants allowing open homes?
While the sale of a rental property can be disruptive, there can also be benefits. While it is not required, some landlords offer incentives to keep the property inspection-ready, such as:
- Reducing the weekly rent in return for presenting the property nicely for viewings.
- Offering a week’s free rent to help with relocation costs.
- Providing a small fee for tidying and preparing the property for a viewing.
- Hiring a cleaner before the inspection.
- Giving a small thank you gift, such as a box of chocolates or movie tickets, after an open home.
- Offering to provide a reference for future rental applications.
What are the rules around open homes?
Open homes can only take place between 8 am and 7 pm and cannot occur on Sundays or public holidays unless you agree. People cannot stay for an extended period. Notice must be given to you in writing, and the required notice periods differ depending on your tenancy agreement.
Remember, if you refuse access to the property when the landlord is legally allowed, you may be in breach of your tenancy agreement.
What are my rights regarding the advertising and promotion of the property?
Photography: The property can be photographed from the outside without your consent; however, they need your consent to take photos inside the property, including photos of your belongings. The landlord should try to discuss and agree on what will be photographed and how the photos will be used. If you're worried about theft, lock away any valuables that could be easily picked up during an inspection.
Signage: The tenant must give consent for a ‘For Sale’ signboard to be placed on the property outside.
On-site Auctions: If the property is being sold via auction, it cannot be held on-site unless you, the tenant, give consent.
What can I do if I want to terminate my tenancy agreement?
If you have a periodic agreement, you can serve a no-reason notice, which is typically 28 days’ written notice, unless the landlord agrees to a shorter time.
If you are on a fixed-term agreement but want to move out because the property is being sold, you may be able to end the tenancy agreement early by mutual consent with the landlord. Ensure this is confirmed in writing and signed by the landlord or agent.
Some landlords are happy to end the tenancy early to fix anything before they go to market, allowing access for open inspections. Discuss this option with your landlord or agent if it suits your needs.
What happens If the landlord wants the tenant to leave?
A landlord cannot terminate a fixed-term agreement due to the sale of the property. They can however end the tenancy on or after the expiry of the fixed-term tenancy with at least 90 days’ written notice. The landlord also needs to state the buyer has specified vacant possession as a requirement in the unconditional sale of the property.
If you have a periodic tenancy agreement, they can issue a notice of termination giving the tenant 90 days’ written notice, but only if they have exchanged a contract of sale with a buyer, and the contract specifies that the property is sold as vacant possession.
What happens to your tenancy after the sale?
If you or your landlord haven’t terminated the agreement, your tenancy agreement remains in place and must be terminated correctly. If you have a fixed-term tenancy agreement, you cannot be asked to leave before the end of the fixed term. If the property is sold before the end of your agreement, the new owner takes over the rights and responsibilities of your previous landlord, meaning your existing terms and conditions still apply – including how much rent you pay, how and when you pay it, and the expiry date of the fixed term.
What happens to my bond?
When the property is sold, both the new owner and previous owner must notify Tenancy Services that the property has changed hands. Your bond will remain with Tenancy Services until the end of your tenancy when the new landlord can make a claim against it or have it paid out to you.
What are the obligations of the new landlord?
The old landlord or agent should provide you with the details of the new owner and advise when to commence paying the new owner. You don’t need to sign a new agreement.
By understanding your rights and obligations, you can navigate the sale of your rental property with greater ease and confidence.
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