Buying a Property With Tenants In Situ
Insight
Purchasing a property with tenants already living in it creates a unique set of legal obligations for buyers. From the moment settlement occurs, you become the new landlord and must comply with the Residential Tenancies Act, honour existing agreements and follow correct processes for bond transfers, inspections and communication.
Tenanted properties can be attractive for investors, but they can create challenges for buyers who want to move in, redevelop the site or adjust rental terms. Understanding the rights of the tenant — and your obligations — is essential before committing to the purchase.
Most people seek advice when the seller provides incomplete tenancy information, when they want to move in after settlement or when the tenancy agreement contains unclear or unusual terms.
How Existing Tenancies Transfer to the New Owner
Tip:
Ask for the full tenancy file early. Missing documents often signal historic non-compliance.
Tenancies automatically transfer to the new owner on settlement. This includes:
- all terms in the tenancy agreement
- inspection frequencies
- rent amount and payment dates
- any special conditions
- bond obligations
The seller must provide all tenancy documentation prior to settlement, including rent ledgers, inspection reports and any notices previously issued.
Notice Requirements if You Want to Move In
If you intend to move into the property, you must follow strict notice rules. Fixed-term tenancies generally cannot be ended early without agreement. Periodic tenancies require proper notice and must meet legal criteria such as landlord move-in or sale of property.
Failure to follow the correct process can result in penalties, delays or Tenancy Tribunal proceedings.
Planning to move in?
A lawyer can advise whether termination grounds apply and what notice is required.
Bond Transfers & Legal Requirements
The buyer must ensure the existing bond is transferred correctly through Tenancy Services. This includes confirming:
- the bond amount lodged
- whether any arrears exist
- whether the bond matches the tenancy agreement
Sellers sometimes fail to lodge bonds properly, creating liability for the new owner. Lawyers ensure the transfer is compliant.
Rent Reviews & Increases
Rent increases must follow strict rules around timing, amount and notice. A new owner cannot raise rent immediately unless the tenancy agreement or Tenancy Services rules allow it. Lawyers can confirm the earliest date an increase is permitted.
Understanding Tenant Rights
Tenants retain full legal rights after the property is sold. They cannot be removed without lawful grounds, and they must receive proper notice for inspections, repairs or entry. Buyers who intend to renovate or redevelop must plan around these rights.
Find a Lawyer for Tenanted Property Purchases
Providing the tenancy agreement, rent history and settlement details helps match you with lawyers who regularly advise on tenant-in-situ transactions.
Need help with a tenanted purchase?
We connect buyers and investors with lawyers experienced in tenancies, bond transfers and termination rules.
Frequently Asked Questions
What does 'tenants in situ' mean?
It means the property is sold with the current tenants remaining in place. The buyer becomes the new landlord and must honour the existing tenancy agreement unless legally terminated beforehand.
Can I move into a property that has tenants?
Possibly, but strict notice rules apply. Tenancies cannot simply be cancelled on settlement. If you intend to move in, you must follow Residential Tenancies Act rules, including valid notice periods and grounds for termination.
Do I inherit the existing tenancy agreement?
Yes. The tenancy automatically transfers to you on settlement. All terms — rent amount, payment dates, bond, inspection frequency and special conditions — continue unchanged unless varied with the tenant’s agreement.
What happens to the bond?
The bond must be formally transferred to the new owner through Tenancy Services. The buyer should ensure the seller provides the correct paperwork and confirms the bond status before settlement.
Can I increase the rent after buying the property?
Rent increases require proper notice and can only occur at legal intervals. You cannot increase rent immediately upon settlement unless specific conditions are met. A lawyer can confirm whether an increase is permitted.
You don’t need all the answers
Property issues can feel overwhelming — especially when you’re facing deadlines. Sharing a few details about your situation is enough for a lawyer to understand the context and guide you through the next steps.
Get Help When Buying a Property With Tenants In Situ
Buying a tenanted property involves legal obligations around notice periods, bond transfers, inspection rights and existing tenancy agreements. Sharing the tenancy agreement, settlement date and any communication from the seller helps match you with lawyers who regularly handle tenant-in-situ transactions.