Buying or Selling a Tenanted Property: Legal Rights and Obligations in Queensland

Introduction

Buying or selling a tenanted property in Queensland involves additional legal considerations compared to selling a vacant home. Existing leases, tenant rights and income arrangements all affect how the transaction must be disclosed and managed.

From 1 August 2025, Queensland’s Property Law Act 2023 introduced mandatory pre-contract seller disclosure through Form 2. For investment properties with tenants in place, disclosure obligations are broader and mistakes carry greater risk. Buyers gain stronger termination rights, and sellers face stricter compliance expectations.

This guide explains how tenanted property transactions work in Queensland, the rights of buyers and tenants, and how sellers can stay compliant.

Why Tenanted Property Transactions Differ From Vacant Sales

A tenanted property is not delivered with vacant possession. Instead, the buyer steps into the role of landlord, inheriting the existing lease and all associated rights and obligations.

This means buyers must clearly understand:

• The lease terms

• Rental income and payment history

• Tenant rights to remain

• Access limitations during marketing

• Future rent review dates

Queensland law requires this information to be disclosed upfront, not discovered later.

Queensland’s Form 2 Requirements for Investment Properties

For tenanted properties, Form 2 Seller Disclosure Statement must include additional tenancy-related information. Sellers cannot rely on “buyer due diligence” to fill in the gaps.

The Form 2 must accurately reflect:

• The existence of any lease or licence

• The nature of the tenancy

• Whether the lease is fixed-term or periodic

If the property is sold subject to a lease, this must be unambiguous.

Seller Disclosure Requirements for Tenanted Properties

Sellers must disclose and attach:

• The current lease agreement and any variations

• Rental income history, typically covering the previous 12 months

• Fixed-term expiry dates or confirmation of periodic tenancy

• Details of rent increases, arrears or concessions

• Any break lease clauses, penalties or incentives

• Tenant options to renew or rights of first refusal

• Tribunal orders or breach notices (if applicable)

Missing any of these can make disclosure defective.

Buyer Rights When Purchasing Tenanted Properties

Buyers purchasing a tenanted property have the right to:

• Receive full lease documentation before signing

• Rely on disclosed rental figures and tenancy status

• Terminate the contract if tenancy disclosure is incomplete or inaccurate

• Take over the lease on the same terms after settlement

Buyers cannot unilaterally end a valid lease simply because ownership changes. Understanding the tenancy is critical to assessing yield and risk.

Seller Obligations During the Sale Process

Sellers must continue to comply with tenancy laws while marketing the property. This includes:

• Providing proper notice for inspections

• Respecting tenant privacy and quiet enjoyment

• Not misrepresenting the tenancy to buyers

• Not promising vacant possession unless legally achievable

Sellers must also ensure the disclosure pack is updated if lease terms change during the campaign.

Legal Risks of Non-Disclosure

Failure to properly disclose tenancy details can lead to:

• Buyer termination anytime before settlement

• Loss of the deposit

• Delayed or failed settlements

• Compensation claims

• Complaints against agents or advisers

Under the 2025 reforms, tenancy non-disclosure is commonly treated as a material defect.

Practical Steps for Buyers

Buyers should:

• Carefully review the lease and Form 2 disclosure

• Confirm rental income aligns with bank assessments

• Understand when and how rent can be increased

• Seek legal advice before committing

Tenanted properties can be strong investments when understood properly.

Practical Steps for Sellers

Sellers should:

• Gather lease documents early

• Ensure rental figures are accurate and supported

• Disclose all tenant rights clearly

• Prepare Form 2 well before listing

Trying to “fix” disclosure after a contract is signed is no longer an option.

Special Scenarios: Auction Sales With Tenants

Auction sales do not bypass disclosure rules. The Form 2 and all tenancy documents must be available to buyers before bidding begins. Buyers retain termination rights if disclosure is defective.

How SearchX Handles Tenanted Properties

SearchX simplifies tenanted property disclosure by:

• Collecting lease documents and rental records

• Validating tenancy information against Form 2 requirements

• Flagging missing or outdated attachments

• Packaging a compliant disclosure pack before listing

• Supporting legal review through SearchX Legal

This reduces termination risk and protects sale outcomes.

Conclusion

Tenanted property transactions in Queensland require careful planning, accurate disclosure and strict compliance. Under the new seller disclosure regime, even small tenancy-related mistakes can derail a sale.

Using SearchX ensures lease information is properly disclosed, Form 2 obligations are met, and both buyers and sellers can proceed with confidence in 2026 and beyond.