Marketing of Rental Properties Allowed During Sales Period

November 2023

Read Time: 3 Minutes

In several recent Tenancy Tribunal cases adjudicators have determined that there is nothing to prevent rental properties from being marketed for sale before the tenant vacates.

When the Residential Tenancy Amendment Act came into effect in 2021 owners were given the option of giving the tenant 90 days' notice to sell the property with vacant possession, or to sell the property with the tenant in place and then give 90 days' notice once there was an unconditional sale and purchase agreement. The 90 days’ notice for the tenant at the end of the sale is only if the new owner wants vacant possession of the house.

At the time of the new law it was expected that you would not be able to list the property for sale until the tenant vacated if notice for vacant possession was provided as a condition of that notice. We look at two recent cases that interpret the law differently.

Case 1: October 2021

In a case taken to the Tenancy Tribunal in October 2021 regarding a misunderstanding of the timing and extension of a 90-day notice period the adjudicator delivered an interesting interpretation of the law.

While both the landlord and tenants were under the impression that section 51(2) of the Residential Tenancies Act 1986 (the Act) meant that the property could not be marketed for sale until after the 90-day notice expired, the adjudicator disagreed.

The adjudicator stated: "I cannot see any logical reason why Parliament would have intended such a restriction. In particular, a landlord is not prohibited from putting a property on the market for sale during a tenancy where no 90-day notice is given. Such a restriction also does not sit well with other sections of the Act... in my view the word “within” in the section is intended to mean “not further off than” or “not after the end of” the period of 90 days after the expiry of the notice. Thus, if the landlord gives a notice to end the tenancy because he or she intends to sell it, the landlord can put the property on the market for sale at any time provided it is no later than 90 days after the expiry of the 90-day notice.”

Case 2: April 2022

In another case taken to the Tenancy Tribunal in April 2022 we see another adjudicator agreeing with the above interpretation of the law.

In this case in which the tenant sought exemplary damages for an unlawful notice and breach of quiet enjoyment, the adjudicator found that the notice was not unlawful.

The adjudicator noted that the landlord only had an obligation to advise the tenant that the premises were going on the market and give appropriate notice. The adjudicator stated: "there is nothing in the subsection (of the Act) to prevent the premises being marketed before the termination date".

Both of these decisions indicate that there is nothing to prevent advertising rental properties for sale before the tenant vacates.

Keeping Up to Date with the Law

At Crockers, our property managers are well informed of legislative requirements which change frequently and keep a close eye on Tenancy Tribunal cases and interpretations of the law.

If you trust us to help look after your most valuable asset, we’ll keep you up to date with all the latest changes, help ensure your property is up to standard and ensure you follow the right protocols when issuing all termination notices.

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