Real estate is a heavily regulated industry. There are a lot of rules and laws that dictate how properties are bought and sold, and even more that govern renting, from the landlord, tenant and agent's perspective.

One of the most confusing parts of real estate, for both property owners and renters, is when sales and renting converge. What happens when a landlord decides selling a rental property is the right move for them, but a renter is still living in the property at the time?

Investment property promotion

Before a property is sold, it often undergoes a rigorous period of promotion, designed to increase interest and unearth potential buyers. During this time, the property owner will want to photograph the property, inside and out; open the home to various possible buyers multiple times; and advertise the property online — even if they don't live in the house and are actually selling a rental property. And while absolutely a property needs to be promoted in order to sell, as a renter, you may feel a little invaded and concerned that people are inspecting your belongings as much, if not more than they are inspecting the house.

But what can you do?

First of all, it's important to know your rights and those of the landlord and agent. In NSW, you must receive written notice that the house will be shown to a potential buyer at least 14 days in advance of the first showing.

In an ideal world, it will be easy for renters and landlords or agents to agree to a time that is convenient for everyone to open the house to a potential buyer. Unfortunately this is not always the case.

As an agent or landlord, selling a house with tenants comes with very specific rules with regards to promotion. Firstly, you need to make sure you give the renter at least 48 hours notice of an upcoming inspection. Realistically, this is in your best interest too, as it gives the renter time to tidy up, store away valuables and basically ensure the property is presentable.

It's important to know that the renter doesn't have to agree to any more than two showings in one week, nor does the renter have to agree to an open house (where anyone from the public can enter the premises). If the renter feels uncomfortable with any average Joe from the street wondering in, they can refuse an open house, meaning you will need to opt for organised inspections with potential buyers.

In some cases, an agent or landlord might want to show the house at an odd time, for example, in the evening after 8pm, in the morning before 8am, on a public holiday or on a Sunday. As a renter, you are entitled to refuse these requests.

Though it might sometimes feel uncomfortable and like you're being chased out, you can, as a renter, remain in the property while an inspection or open house is taking place. If you don't want to stick around while people walk through your home, make sure you check with your insurance company who is responsible should anything of value be stolen and if it will be covered.

In terms of making it known the property is for sale, and how it looks, an agent or landlord must seek agreement from a renter to put up a 'for sale' sign on a house and to photograph the inside. They can photograph the outside without consent.

What happens if you want to break the tenancy agreement?

Selling a rental property can be a bit tricky because renters can feel uncertain and insecure and opt to move out before the property is sold, leaving landlords with no source of income. Similarly, a renter may suddenly find themselves with a new landlord if they remain in the home and it is sold.

If, as a renter, you want to leave the property and find somewhere more secure before the sale of the rental property, the process depends on what sort of rental agreement you have in place. If your fixed term agreement has already expired and you haven't made another, so you are essentially rolling month-to-month, you can give 21 days' notice and then move out. Make sure all your rent is paid up-to-date and the property is left in the right condition.

If you are on a fixed-term agreement, there are options for renters to terminate without suffering a big expense. These generally relate to the landlord having made the fixed-term agreement without disclosing the intention to sell the property, and then declaring their intention to sell later.

As a property owner, terminating a fixed-term agreement before or after the sale of a rental property can be more difficult. Basically, if the agreement is still in place, you must sell the property with the understanding that the tenant can remain in it until their agreement expires.

If your renter is not on a fixed-term agreement, you can give 30 days' notice once the property is sold and if the contract requires you to give 'vacant possession' to the new owner, that is, you need to hand over the house without a tenant because the new owner likely intends to move in.

What happens if you want to remain in the property once it is sold?

Obviously whether or not the new owner intends the property to become an investment or their own home is up to them, but if you have a fixed-term agreement with the old owner, the new owner must honour it -- essentially they are 'selling the house with tenants' even if just for the duration of the agreement.

When the property is sold, you may be provided with a new agreement to sign (at the very least, you should be provided with the details of the new owner), but don't worry if you don't get sent a new agreement, the old one will remain in place until it ends.

Making the situation work for everyone when selling a rental property

Buying and selling property can be fraught with emotion; and in the case of properties that are rented, it may not only be the seller and new buyer who get caught up in it. As a property owner and agent, try to make the situation as easy as possible on your renter, after all, they have helped pay for you property for the last several months-to-years, and they can influence how it appears to potential buyers who want to view it.

As a renter, it's also a good idea to make the situation seamless. It definitely can be frustrating and challenging, especially because you don't always know what's going to happen next, but being agreeable and helpful throughout the process will likely mean the agent treats you with as much respect and consideration in return, and paves the way for a smooth transition should you end up remaining in the property under a new landlord.

For more information, NSW Fair Trading has all the latest updates.