Selling a rental property with tenants in Rotorua

The tenancy does not end because you want to sell

Selling a house with tenants is ordinary, and it goes wrong when the people living there are treated as a temporary obstacle. The agreement continues until it is ended properly, or until they agree to end it. A sign on the lawn does not cancel it. A buyer does not get a vacant house unless that was arranged.

The page to trust is Tenancy Services: selling a rental property. The notice periods below come from there. Read it before you serve anything. This is a Rotorua landlord's map of that page, plus the pricing question at the end. It is not legal advice. If the situation is messy, use a lawyer. Rotorua Property Value introduces owners to licensed agents. We do not run tenancies.

Periodic and fixed-term tenancies

A periodic tenancy rolls on until the right notice is given. A fixed-term tenancy runs to its end date. Look at the agreement you signed. Tenancy Services describes three situations: the buyer keeps the tenants, the buyer is promised a vacant house, or you end the tenancy first so you can market an empty one.

Selling with the tenants staying

If the buyer will keep the tenants, the tenancy continues and the buyer becomes the landlord. The terms, including rent-increase rules, do not reset because the house sold. Contact details are exchanged. If Tenancy Services holds the bond, both landlords complete a change of landlord form. Tell the tenants who the new owner is and when they take over, and give the new owner the agreement. You are selling a rented house, not a vacant family home. Do not advertise vacant possession you cannot deliver.

When the buyer wants the house empty

If an unconditional agreement requires vacant possession and the tenants are periodic, Tenancy Services says you must give at least 42 days' written notice. That can move settlement. Write a date you can achieve. A fixed term cannot be ended early just because the property sold, unless the tenant agrees. If they do not, settle later or sell with the tenancy in place. Expiry rules depend on when the fixed term started, including the 11 February 2021 divide on their page, and mortgagee sales differ. Do not serve a periodic notice on a fixed-term household.

Emptying the house before you market it

If you want the house empty for the photographs and the tenants are periodic, Tenancy Services says you must give at least 90 days' written notice, and you must put the property on the market within 90 days after the tenancy ends. That is a long runway, not a shortcut, and it comes with a duty to list. Fixed-term expiry is stricter and depends on the start date. This page will not compress those rules into one number of days. Use their selling page, or a lawyer, before you give notice just to clear the photos.

Telling tenants, and viewings

If you put the property on the market, you must tell the tenant in writing. Tenancy Services suggests a conversation in person as well, so the first news is not an agent on the doorstep. Their site has notice templates. Use those rather than a letter from a forum.

Viewings need permission, not a short notice and a key. You need permission for photos, for buyers, and for an agent, a registered valuer, or a building expert. The tenant can refuse photographs of their possessions. They cannot unreasonably refuse access, but they can limit days and times, refuse open homes, refuse an auction at the house, and insist on appointments. They can ask for a temporary rent reduction in exchange for open homes. You do not have to agree. They may be present. Once access is agreed, write it down and have everyone sign. Maintenance and healthy homes work have their own access rules, which are not the rules for open homes. Do not mix them. Tenancy Services' access page covers both.

Healthy Homes, because buyers will ask

Rentals must comply with the healthy homes standards: heating, insulation, ventilation, moisture ingress and drainage, and draught stopping. The overview is on Tenancy Services. Some exemptions exist. The site explains them. Do not assume an older Rotorua house is exempt because it is cold, or that it complies because nobody has complained.

New or renewed agreements need a compliance statement. Have it, plus any exemption and the insulation and heating records. An investor will ask. The standards are not a builder's report. Buyers here also ask about geothermal corrosion, which the geothermal guide covers, and about the particular suburb on the suburb guides. A suburb name does not prove compliance.

Tax, price, and the limit of this page

Selling a rental can have tax consequences. The bright-line test is one of them. This page does not apply it to your dates or your use of the property. Use the IRD bright-line pages, or a tax adviser. That mention is as far as we go.

A tenanted house and a vacant house attract different buyers, and settlement may wait on notice. The district median will not price a rental in Glenholme or Springfield. Say which offering you mean when you ask for a market appraisal. It is an opinion, not a registered valuation or tenancy advice. Commission, a lawyer, and often a LIM still apply: see costs. A private seller has the same access duties. The private sale guide does not invent an exception.