Understanding tenant rights is crucial when selling a property with a current lease. As of December 2025, Victorian legislation provides tenants with significant protections, impacting the timing and process of a sale.
In 2026, if a property is sold in Melbourne, the new owner generally inherits the existing tenancy agreement. This means the buyer must honour the lease until its expiry. Currently in Melbourne, a tenant has the right to quiet enjoyment of the property, meaning they can continue living there undisturbed during the sales campaign and until the lease ends. Sellers must provide reasonable access for inspections, with at least 24 hours’ notice. While there are no specific laws preventing a sale during a tenancy, it can influence buyer interest – particularly for investors seeking immediate vacant possession. Properties with existing tenancies may appeal to other investors, but some buyers, especially those seeking to occupy the property themselves, may favour vacant land. As of December 2025, we’re seeing increased demand in the Eastern Suburbs for family homes, and a well-presented property, even with a tenant, can still achieve a strong result. It’s important to note that changes announced for 2027 regarding rental minimum standards will apply to the new owner post-sale.
Navigating the sale of a tenanted property requires careful consideration of both the seller’s and tenant’s rights, ensuring a smooth and compliant transaction.