Selling a Tenanted Property in WA: What Landlords Need to Know Before Settlement

Selling a tenanted property in Western Australia is a different process to selling a vacant home, and it catches more landlords off guard than you might expect. You have legal obligations under the Residential Tenancies Act 1987 that affect everything from how you run inspections to what documents the buyer receives at settlement. Miss a step and you are looking at delays, a buyer dispute, or a settlement that does not go ahead on the day.

This article covers the key things you need to know: tenant notice requirements, how your lease type affects the sale, vacant possession, bond transfers, and what the recent WA tenancy law changes mean for you as a seller. For a broader overview of what happens between contract and keys, see our guide to the full property settlement process.

Can You Sell a House in WA with Tenants?

Yes. You can sell your investment property while tenants are living there. The central question is whether the buyer wants the property with the tenant in place, or whether they need vacant possession by settlement day. That decision determines almost everything else in the process.

In Perth’s rental market, investor buyers are common, and many are actively looking for a tenanted property with a reliable tenant and current market rent already established. A well-managed tenancy with a good payment history can be a genuine selling point. The process just requires more coordination than a standard sale.

Your First Obligation: Notifying the Tenant

Before you can hold a home open or allow a single buyer to walk through the property, you must give your tenant written notice of your intention to sell. This is a requirement under the Residential Tenancies Act 1987, not just good practice.

Once that notice is given, all inspections must be conducted at reasonable times with reasonable written notice before each one. In practice, this means at least 24 to 48 hours’ notice, within reasonable hours: 8am to 6pm on weekdays, 9am to 5pm Saturdays, or any other time the tenant agrees to. The Act does not set a fixed number of hours for sale-related inspections, so the practical standard is to give as much notice as possible and confirm the time suits the tenant.

A cooperative tenant makes the campaign considerably easier. Having a straightforward conversation early on, explaining what is happening and what you need from them, goes a long way. Some sellers offer a small incentive during the campaign period, such as a temporary rent reduction or a gift card, to acknowledge the disruption. It is not required, but it usually results in better access and a better-presented property at inspections.

Fixed-Term Lease vs Periodic Tenancy: Why It Changes Everything

The type of lease your tenant is on will determine most of the decisions you make as a seller. These two situations are handled very differently under WA law.

Fixed-Term Lease

If your tenant has a fixed-term lease that runs past your planned settlement date, you cannot end it early because you have decided to sell. The lease is a binding agreement. The buyer is legally required to take over as landlord and honour the lease until it expires.

You have two realistic options:

• Sell subject to the existing lease: the buyer takes on the property and the tenant’s lease terms as they stand. This suits investor buyers who are comfortable receiving rental income from settlement day.
• Negotiate a mutual agreement to vacate: the tenant can agree to leave early, but you cannot compel them. If they agree, get it in writing. If they do not, the lease runs to its end date.

Where possible, aligning your settlement date with the natural end of the lease removes the issue altogether. It is worth checking the lease expiry date as early as possible when you are planning the sale.

Periodic Tenancy

If your tenant is on a periodic (month-to-month) agreement, you have more flexibility. Once a contract of sale has been signed, you can give the tenant a minimum of 30 days’ written notice to vacate under Section 63 of the Residential Tenancies Act, provided the notice is connected to the property sale.

Two things to be aware of: first, the notice can only be issued after a signed contract of sale is in place. You cannot give notice before you have a buyer. Second, if you want to end a periodic tenancy outside of a sale context, without grounds, the required notice period is 60 days.

Vacant Possession or Sale Subject to Lease: Get It in the Contract

This is the decision that causes the most problems when it is left unclear.

Standard Offer and Acceptance contracts in Western Australia assume vacant possession at settlement unless the contract specifically states otherwise. If your tenant is still in the property on settlement day and the contract required vacant possession, you are in breach.

If the buyer wants vacant possession, check that the settlement date gives you enough time to end the tenancy lawfully. For a periodic lease, you need time to issue and serve the 30-day notice after signing. For a fixed-term lease, the buyer may need to wait until the lease expires, or you need to negotiate an early exit with the tenant first.

If the buyer is an investor taking on the tenant, the contract must include a clause confirming the sale is subject to the existing tenancy, with the lease start date, end date, and weekly rent clearly specified. The buyer then steps in as the new landlord from settlement day.

Ambiguous contracts cause disputes at settlement. Sort this out clearly before signing.

Documents to Hand Over at Settlement

When a tenanted property settles, you are required to provide the buyer with the full tenancy documentation. Your settlement agent in Perth will confirm exactly what is needed, but this typically includes:

• The current signed lease agreement
• The original property condition report (completed at the start of the tenancy)
• A rental payment ledger showing the full payment history
• Any routine inspection reports conducted during the tenancy
• Bond records and the Bond Transfer documentation

On the bond: the bond does not transfer to the new owner automatically. Your settlement agent will prepare and lodge a Bond Transfer form with Consumer Protection WA, the bond administrator, so the bond is formally reassigned from you to the buyer. If this is not done at settlement, the new owner has to chase it up separately after the fact. It is a straightforward step that is easy to overlook without experienced help.

On property management: if the property is managed by a property manager, you need to arrange for the management agreement to either transfer to the buyer or be terminated, depending on what the buyer wants. Any maintenance funds held by the manager (often called a float) will also need to be handed over or refunded. Get this sorted well before settlement day.

Rent and Fee Adjustments at Settlement

Like council rates and water charges, rent is adjusted at settlement so each party pays for the period they own the property.

If your tenant has paid rent in advance that extends past the settlement date, the buyer is entitled to that portion as a credit against the purchase price. Your settlement agent calculates all of these adjustments as part of the settlement statement, so you will know the exact figures before settlement day. There should be no surprises.

If there is a property manager in place, any management fees paid in advance will also be adjusted. The settlement statement will account for all of it.

The Pre-Settlement Inspection

Buyers are entitled to a pre-settlement inspection, typically in the 48 hours before settlement. When tenants are in the property, this requires coordination. The tenant needs to be given reasonable notice, and the property needs to be accessible.

The property should be in the same condition as when the contract was signed. If there has been damage to the property during the tenancy, that is a matter between you and the tenant under the Residential Tenancies Act, handled separately to the settlement process. Your settlement agent handles the settlement; tenancy condition disputes are outside that scope.

What the Recent WA Tenancy Reforms Mean for Sellers

WA has been through a significant round of tenancy law changes in the past two years. If you have not kept up with them, here is what matters for sellers.

Phase One reforms, effective July 2024:

• Rent increases are limited to once every 12 months
• Rent bidding is banned: you cannot encourage tenants to compete with each other on rent
• Tenants have the right to request a pet; you can only refuse with valid, documented reasons
• Bond release processes have been updated with new procedures

Phase Two reforms, announced May 2026: Phase Two of the WA rent reforms, which includes a proposed ban on no-grounds terminations at the end of a fixed-term lease, has been introduced to Parliament but has not yet passed into law as at May 2026. If it passes, it would change the rules around how sellers can end tenancies in preparation for a sale. Check Consumer Protection WA for the current position before making any decisions based on termination notices.

A note on Capital Gains Tax: if you are selling an investment property, CGT may apply to the gain on the sale. Settlement agents cannot advise on CGT or any other tax obligations. Speak with your accountant or tax adviser before settlement to understand your position.

How Your Settlement Agent Fits In

When a tenanted property is being sold, settlement agents in Perth handle a broader set of responsibilities than in a standard residential settlement. While they cannot advise on lease disputes, tenancy law, or your rights as a landlord, they manage the settlement-specific steps that tie the whole transaction together:

• Confirming the contract correctly reflects the tenancy arrangement (vacant possession or subject to existing lease)
• Calculating rent adjustments, management fee adjustments, and related items in the settlement statement
• Preparing and lodging the Bond Transfer form with Consumer Protection WA
• Coordinating document handover: lease, condition report, payment ledger
• Preparing transfer documents and lodging them with Landgate once settlement is confirmed
• Coordinating with the buyer’s settlement agent and lenders to complete the transfer

If there is an active dispute with your tenant, or you are unsure about your rights around notice and termination, a property solicitor or Consumer Protection WA’s tenancy advisory service is the right starting point. Settlement agents take over once the legal groundwork is in place.

Common Mistakes to Avoid

Starting inspections before notifying the tenant. Written notice of intention to sell is required before any inspection. It is a legal requirement.

Assuming a fixed-term tenant will leave. They have a legal right to stay. Plan the settlement date around the lease, not the other way around.

Leaving the tenancy arrangement ambiguous in the contract. Spell it out: vacant possession by a specific date, or sale subject to existing lease with lease details included. Vague wording creates settlement day disputes.

Forgetting the bond transfer. It does not happen automatically. Make sure your settlement agent lodges the Bond Transfer form as part of the settlement process.

Not handing over the full tenancy documentation. The lease, condition report, and payment ledger all need to go to the buyer. Missing documents cause delays or post-settlement disputes.

Overlooking the property management handover. If there is a property manager involved, arrange for the agreement to transfer or terminate before settlement day. For a full seller preparation checklist, see our seller’s settlement checklist.

Frequently Asked Questions

Do tenants have to allow buyers to inspect the property? Tenants cannot unreasonably refuse inspections once written notice of the intention to sell has been given, provided inspections happen at reasonable times with reasonable notice. Working with your tenant early in the campaign makes this much smoother in practice.

Can a buyer demand vacant possession if there is a fixed-term lease in place? No. If the contract requires vacant possession but a fixed-term lease runs past the settlement date, it is the seller’s responsibility to resolve that before settlement. Buyers cannot override a valid fixed-term lease.

What happens to the tenant when the property is sold? If the sale is subject to the existing tenancy, the buyer becomes the new landlord and the lease continues unchanged. The tenant’s rights stay the same. If the contract requires vacant possession, the tenancy must be ended lawfully before the settlement date.

Does the buyer have to keep the same property manager? No. The buyer can choose to self-manage or appoint a new manager. The existing management agreement will need to be transferred or terminated as part of the handover at settlement.

Can I list the property for sale before telling the tenant? You can list the property, but you must give written notice of your intention to sell before conducting any inspections or home opens. Getting the notice to the tenant early avoids complications once the campaign starts.

Ready to Sell?

There is more to selling a tenanted property in Western Australia than most landlords expect. The notice requirements, lease type, contract wording, bond transfer, and documentation handover all need to be handled correctly for settlement to go ahead on the day.

At Strategic Settlements, we handle tenanted property sales regularly and know exactly what the extra steps involve. Get a quote for your upcoming settlement, or contact us to talk through your situation with our team.