On the front page of a Contract of Sale the vendor willindicate if the property is being sold with “vacant possession” or “subject totenancy”.  If neither box is ticked,vacant possession is the default selection.

If a contract is marked vacant possession, the propertyneeds to be vacant at settlement and you are not required to settle if it isnot vacant.

If the property is being sold ‘subject to tenancy’ thecurrent Residential Tenancy Agreement (RTA) and any amendments to thatagreement should be attached to the contract.

The RTA will show the term of the tenancy, that is, a fixedstart and end date for the tenant’s occupation. If you are buying sometimebetween the start and end dates, then the tenancy is a ‘current tenancy’, andyou are buying the property subject to that tenancy.  In this circumstance, neither you nor thevendor can require the tenant to vacate before the end of the fixed term.

When you are the owner, you can give a minimum of 30 days’ noticeto the tenant to end the tenancy on the end date.  

If the RTA shows that the end date on the lease has passed,the tenancy is an expired tenancy, often called a periodic tenancy.  In this circumstance the tenant is continuingto occupy the property under the same terms as the now expired lease.

The tenant under an expired lease is entitled to stay until theyare given the appropriate notice to vacate; currently 90 days.

If you are buying a property with an expired tenancy, and youwould like the property to be vacant, the contract of sale should be amended beforeexchange to show vacant possession.  Ifthe contract is marked vacant possession the vendor can give just 30 days’notice to the tenant to vacate.  

It should be noted that when a property is being sold, atenant can terminate a fixed term agreement with just 14 days’ notice unless itwas disclosed to the tenant before entering into the RTA that the property wasto be sold.  If the tenancy was aperiodic tenancy, and the property is being sold, the tenant can vacate at any time.  In other words, even though the contract hasbeen marked ‘subject to tenancy’ the vendor does not guarantee that the tenantwill still be in occupation at settlement.

This information is intended to be general in nature and does not takeinto account your particular situation, objectives or needs. Before acting onany information, you should seek professional legal advice.