What does “Subject to Tenancy” mean?
When a property is sold subject to tenancy, the buyer agrees to take over the lease. The tenant stays in place, and the buyer becomes the new landlord at settlement.
The contract must clearly specify that the sale is subject to tenancy. If it doesn't, the default legal position is that vacant possession is required.
Buyers: This option might suit you if you’re an investor, but it comes with risk:
You can review consumer affairs- renting fundamentals here.
Which option is right for you?
When buying or selling a tenanted property, the difference between vacant possession and subject to tenancy is more than just a tick box in the contract. It requires an evaluation of legal risk, timing, and strategy. Done right, it’s seamless. Misunderstood, it’s costly.
Selling? Get advice before you offer vacant possession.
Buying? Know what you’re inheriting and what you’re legally entitled to.
The information is general in nature and does not constitute legal advice. If you are buying or selling, please contact us to request legal advice.