Still making sense of sales

Fair Trading NSW has just released its latest edition of The Letterbox - this time it's all about "privacy and access"...

Now, just like in the last issue, the latest Q & A session includes some comments that we're not so comfortable with.

Q: What rights do tenants have when the owner is selling the property and requires frequent access for inspections? Can tenants be asked to leave during inspections?

A: If a landlord wants to sell a rental property, the tenant must be given 14 days written notice before the first property inspection. If the landlord intended to sell the premises but did not inform a new tenant of this fact before the lease was signed, the tenant can terminate the lease with 14 days notice and doesn’t have to compensate the landlord.

Okay. We agree, but we think they've forgotten to include a closing sentence of considerable importance:

"If the landlord had no intention to sell the premises when the tenancy agreement was signed, and only later decided to sell, then once so informed the tenant can terminate the lease with 14 days notice and doesn't have to compensate the landlord."

By way of explanation, we refer to this previous post on The Brown Couch, where we extracted a relevant passage from the CTTT's decision in Kutzner v Kamp (NSWCTTT unreported). We reproduce this passage here again:

The issue for determination is whether in these circumstances the tenants were entitled to give notice of termination under section 100(1)(c) of the Residential Tenancies Act 2010. I am satisfied that it is not a requirement of this provision that the landlord must have an intention to sell the property at the time of entering into the residential tenancy agreement which was not disclosed. It is only necessary for the landlord to have notified the tenant of such an intention during the fixed term without notice prior to commencement of the tenancy. "Disclosure" in the sense used in s100(1)(c) does not mean disclosing what was known to the landlord but rather whether prior notice had in fact been given of the landlord's subsequent decision.

The question arising upon the Tenant being told of the intention to sell, is whether the Tenant had been told at the commencement of the tenancy that this would happen. It is not an answer to say that the landlord did not know then that this would occur.

It is our view that Kutzner v Kamp is based on a correct interpretation of the law.

As has been noted in comments on our earlier posts, and in conversations with tenants' advocates across New South Wales, Fair Trading NSW has sometimes given information to tenants that is not consistent with the decision in Kutzner v Kamp. To that end, it is disappointing, but not surprising, to see the information published today in The Letterbox.

On the other hand, the CTTT's annual report for 2010/2011 includes the following case study on page 35:

Click on the image to enlarge

You can find more information about what to do when the landlord wants to sell here, here and here.

As with all things, if you are not sure about a situation with your tenancy, contact your local Tenants' Advice and Advocacy Service for a chat. You can find their details here.