A tenanted property is often a selling point to potential Buyers which means that investors will often make enquiries about the tenancy and desire that it remain in place after settlement. The notation of the tenancy on the QLD contract (on page 4 of the REIQ contract) would then be done in the usual manner.
The reason for the notation on the contract of the tenancy is that it is an encumbrance on the property, limiting the rights of the registered owner. Additionally, the Seller is required to provide vacant possession to the buyer at settlement, subject to the tenancies. If no tenancy is noted on the contract and the Seller is unable to provide that vacant possession, the Seller will be in breach and the buyer will be entitled to damages, terminate the contract or both.
A tenancy may be terminated where there is a sale contract however, by giving the tenant a formal ‘Notice to leave’. It is important to understand a minimum notice period applies of 2 months. The same period applies for the ending of a fixed term agreement. Accordingly, it will be important to manage the expectations of buyers, for example where they wish for a 30-day settlement and immediate possession, but notice has not been given to the tenant.
Are you looking to sell your property in Queensland or Victoria? If so, don’t hesitate to reach out. Ownit provides seamless and stress free conveyancing to buyers and sellers!
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