About 30% of Victorian residential sales involve a tenant still living in the property at settlement. For apartment buyers, that statistic captures a reality many don’t see coming — the unit you’re buying might not be empty when you’re scheduled to take ownership. Across Australia, the rules around vacant possession vary by state, tenancy type, and the reason for ending the lease, and getting them wrong can delay your move-in by months.
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This article is general information only and does not constitute professional advice. For your specific situation, consult a qualified professional.
Apartment buyers often assume that the settlement date and the vacant possession date are the same thing. They aren’t always. The seller has to give proper notice to the tenant, and if that notice is wrong or the tenant doesn’t leave, the buyer is stuck waiting — or forced to become a landlord they never planned to be. Here’s what you actually need to know.
What I tend to notice is that buyers focus on the price and the strata report but spend almost no time on the tenancy situation. If there’s a tenant in place, that lease is the single biggest variable in your settlement timeline.
Notice periods, lease types and the real cost of a sitting tenant
The headline purchase price is not the only number that matters when you’re buying an apartment with a tenant inside. The type of lease they’re on, the notice the seller has given, and the state you’re in all determine whether you move in on time — or start paying a mortgage on a unit you can’t enter.
In Victoria, a fixed-term lease is binding until its end date. A buyer cannot force the tenant out early just because settlement has happened. The tenant stays, and the buyer becomes the new landlord. That means you collect rent at the existing rate, which might be 2–4% below market, as noted in research on Victorian buying scenarios. If you planned to live there yourself, you’re out of luck until the lease expires.
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| Scenario | Notice Required | Can tenant stay after settlement? |
|---|---|---|
| Periodic (month-to-month) tenancy — sale reason | 60 days minimum (VIC) | No, if notice properly served |
| Fixed-term lease ending naturally | 28+ days before end date (VIC) | No, if not renewed |
| Fixed-term lease — early break for sale | Generally cannot break early | Yes — buyer inherits lease |
| Posted termination notice (NSW) | Add 7 working days for delivery | Depends on notice period |
Beyond the lease itself, there are costs tied to the bond and rent adjustments. At settlement, any rent paid in advance for periods after settlement gets credited to you as the buyer. Rent that was overdue before settlement stays with the seller as a debt they can pursue. If the tenant refuses to sign the bond transfer form, the bond stays with the seller and you receive the bond amount in cash instead — which means you hold the deposit but have no protection against future damage. Sorting out the legal side of these adjustments is where something like a real estate law service can help you check the fine print before you sign.
Mistakes apartment buyers make with vacant possession
The research points to several errors that keep cropping up. Each one has a mechanical reason and a fix — if you know where to look.
Assuming the tenant will leave at settlement
This is the most expensive mistake. Without a vacant possession clause in the contract, the seller has no obligation to deliver the property empty. And even with that clause, if the tenant is on a fixed-term lease that hasn’t ended, the lease overrides the contract. The buyer inherits the tenancy. In Victoria, a fixed-term lease generally cannot be broken early for a sale — the buyer becomes the landlord whether they want to or not. My first move would be to ask the agent, before you even make an offer, exactly what type of tenancy is in place and when the lease ends.
Not checking the notice was served correctly
In NSW, a termination notice must be in writing, signed and dated, include the property address, state the end date and the ground for termination, and come with a termination information statement. If any of those pieces are missing, the notice is invalid. If the notice was posted, the seller must allow an extra 7 working days for delivery. A buyer who settles on the original date could find the tenant still legally inside. Ask your conveyancer to confirm the notice was properly served before you exchange contracts.
Overlooking re-letting exclusion periods
After a termination notice takes effect, NSW law imposes a re-letting exclusion period — a set amount of time when the landlord cannot enter into a new tenancy agreement. It is an offence to rent out a property during that period. As a buyer, if you plan to move in yourself this doesn’t affect you, but if you want to re-lease the apartment immediately, check whether the exclusion period has expired. If it hasn’t, you could be breaking the law without realising it.
Skipping the pre-settlement inspection negotiation
Until settlement, you cannot inspect the property without the tenant’s consent. The seller can request it, but the tenant can say no. After settlement, you must give 24 hours written notice for routine inspections and can only do them once every six months. Building and pest inspections also require both vendor and tenant consent, and photography needs separate tenant permission. If you need access for any reason before settlement, negotiate a tenant cooperation clause into the contract upfront.
How to secure vacant possession — step by step
This section walks through what needs to happen, in what order, to get the apartment empty and ready for you on settlement day. The process involves the seller, the tenant, and your legal team, and each step has timing rules that matter.
Step one: Identify the tenancy type and end date
Before you make an offer, get the details in writing. Is it a fixed-term lease or a periodic tenancy? When does it end? What’s the rent and bond amount? In Victoria, these must be disclosed under Section 32 of the Sale of Land Act — the seller’s solicitor must provide the lease document, bond reference number, rent rate, last rent increase date, and any outstanding repair requests. If the seller can’t produce a lease, assume the worst: a long fixed term with below-market rent.
Step two: Verify the termination notice
If the seller claims the tenant is leaving, ask for a copy of the termination notice. It must include the property address, the end date, the ground for termination, and be signed and dated. In NSW, supporting documents for a sale-related termination must include the contract for sale or a written statement from the seller’s solicitor confirming the contract date, settlement date, and that vacant possession is required. Non-essential information (like contact details) can be redacted, but the core facts must be there. If the notice was posted, add 7 working days to the delivery timeline.
Step three: Negotiate special conditions into the contract
Your conveyancer can add clauses that protect you if the tenant doesn’t leave. Common ones include: a vacant possession warranty (the seller guarantees the property will be empty at settlement), a right to rescind (if vacant possession isn’t delivered, you can walk away and recover your deposit plus reasonable costs), and a holding rent clause (if settlement is delayed because the tenant stayed, the seller pays you the market rental rate for the property each day). These conditions turn a verbal promise into a legal obligation with consequences.
Step four: Handle the bond transfer and rent adjustment
At settlement, the bond needs to move from the seller to you. In Victoria, the vendor’s solicitor prepares the Bond Transfer form, the tenant signs it, the seller signs, you sign, and the RTBA processes it within 14 days. If the tenant refuses to sign, you get the bond amount in cash at settlement. Rent paid in advance for periods after settlement gets credited to you. Rent in arrears stays with the seller. A legal document review service can check that these figures are calculated correctly in your settlement statement.
Step five: What happens if the tenant doesn’t leave
If the tenant is still in the property after the termination date, the seller must apply to the relevant tribunal for a termination order. In NSW, that’s the NSW Civil and Administrative Tribunal. The order sets a new date for vacant possession and requires the tenant to leave by then. This process takes weeks, not days. As the buyer, your settlement gets pushed back, and your holding costs start stacking up. The right to rescind clause in your contract becomes your best protection — it lets you walk away with your deposit intact rather than waiting indefinitely.
Frequently asked questions about vacant possession for apartment buyers
Can I inspect the apartment before settlement if a tenant lives there? ▾
What happens to the bond if the tenant doesn’t sign the transfer? ▾
Can a fixed-term lease be broken early just because the property is sold? ▾
What is a re-letting exclusion period in NSW? ▾
Do I need a lawyer to review a vacant possession clause? ▾
The vacancy gap that catches most apartment buyers off guard
The distance between settlement day and the day you actually move in is often wider than buyers expect. It’s not about the price you paid or the condition of the apartment — it’s about whether the person living there has a right to stay. That right is determined entirely by the lease and the notice that was served, not by the sale contract. If you’re buying an apartment that’s currently tenanted, the tenancy is the deal. Everything else follows from it.
Remember: this article is general information only. For advice on your specific situation, speak to a qualified professional.
If this was useful, you might also want to read common mistakes to avoid when buying an apartment in Australia.
Sources and Further Reading
Understanding strata bylaw enforcement powers when buying an apartment — A companion guide to what you inherit as an owner beyond the tenant situation, covering bylaw compliance and strata obligations.
Apartment inspections: red flags Aussie buyers need to spot — Practical tips for what to look for during inspections, including how tenant-occupied units can hide issues.
Precontract Review (2024). Buying with Tenant in Possession — Victoria. 🔗
Collins Quarters (2025). Property Law Act Australia: A Complete 2026 Guide for Buyers, Sellers, Landlords and Foreign Investors. 🔗
