NSW Fair Trading’s October update asks landlords to think through every option before ending a tenancy to sell. That’s good advice, and plenty of owners will decide to sell with the tenant in place. The sale contract then deals with the tenant, and the conveyancers deal with the money between buyer and seller.
What nobody plans for is the trust account. Rent keeps coming in through settlement, the owner changes halfway through a rent period, and the bond has to follow the property. Get the timing wrong and the wrong owner gets paid. We’ve seen it go unnoticed for a year, until the seller’s accountant asked about their end of financial year statement.
The short version
- Sell with vacant possession or with the tenant in place. If it’s vacant possession, the NSW notice periods depend on whether a contract has been signed yet.
- The conveyancers adjust rent at settlement from your paid-to date, so give them an accurate tenant ledger and tell them if anything changes before settlement.
- Rent is paid to whoever owns the property on the day it’s receipted. Any receipt that spans settlement needs checking by hand.
- The bond stays lodged. In NSW you update the landlord on the bond in Rental Bonds Online, and no bond money passes through trust.
- Close the seller’s folio properly: final statement, pending bills moved or cancelled, nothing left behind.
First, the tenancy question
Fair Trading’s point is that ending a tenancy isn’t the only way to sell. A property can be sold “subject to existing tenancy”. The buyer takes over as landlord on the same lease, and the tenant just starts paying someone else. Investor buyers often prefer it.
If the owner does want vacant possession, NSW has had two separate sale grounds since 19 May 2025, with very different notice periods:
| Ground | Fixed term 6 months or less | Fixed term over 6 months | Periodic |
|---|---|---|---|
| Proposed sale (vacant possession needed to sell) | 60 days | 90 days | 90 days |
| Actual sale (contract signed, requires vacant possession) | 30 days | 30 days | 30 days |
Neither ground lets you end a fixed term early. The notice has to go out with supporting documents. For a proposed sale that’s the proposed contract or the agency agreement. For an actual sale it’s the contract, or a letter from the solicitor or conveyancer giving the settlement date. After a proposed-sale termination, the property can’t be re-let for six months. Separately, the tenant needs at least 14 days’ written notice before the property is first opened to buyers.
That’s the tenancy side. The rest of this article is about what happens in your books.
Settlement is a rent adjustment, not a handover
The conveyancers apportion rent at settlement. The seller keeps rent up to the settlement date and the buyer gets credit for anything the tenant has paid beyond it. They work this out from the paid-to date you give them, so it’s only as good as your ledger.
Give them the paid-to date, not the rent amount. A tenant who pays weekly, fortnightly or monthly can be paid to almost any day. What the conveyancer needs is the date the tenant is paid to, and whether there’s any part payment or credit sitting on the ledger. If you’re unsure how your software arrives at that date, our piece on paid-to dates and part payments walks through it.
Tell them when it changes. Settlement dates move. If the tenant pays again between the date you sent the figures and settlement, the adjustment is now wrong. A short email to both conveyancers with the updated paid-to date saves a dispute later.
Arrears are where it gets messy. Rent the tenant owes for the seller’s period, paid after settlement, still belongs to the seller. Your software won’t know that.
Why the wrong owner gets paid
Property management software pays rent to whoever owns the property on the day the receipt is entered. It doesn’t look at which days the rent covers. That one fact causes most settlement problems we see.
Take a weekly tenant who is paid up to a few days before settlement and then pays three weeks in one hit after it. The whole receipt lands on the buyer’s folio. It gets disbursed to the buyer at the next run, with a management fee charged on all of it. The seller’s few days went with it, and nobody notices until the seller asks.
The same thing happens with a tenant who left owing rent before the sale and pays it off later. The rent arrives after settlement, so it goes to the buyer, even though the buyer never owned the property for those weeks.
The fix is a habit. For every sold property, check each receipt after the change of ownership until the tenant is paid past settlement. Anything that covers days before settlement is the seller’s. Move it with a journal between the owner folios, and decide up front how you’ll treat the fee already taken on it. Then tell the buyer before their next statement shows the money going out.
The change of ownership in your software
Both PropertyMe and Property Tree have a proper change of ownership process. Use it, and use it on the right day.
Don’t run it early. Set the new owner up in advance, with their bank details, fees and disbursement settings, but don’t make them current until settlement. In the meantime, a withhold on the seller’s folio stops you disbursing money that may need to come back.
Watch the “vacating” workaround. Some offices enter a vacate with a charge-to date of settlement so the seller isn’t paid past it. In Property Tree, that caps every receipt at the charge-to date and puts the rest in tenant held funds. Once the change of ownership is done, the tenant shows as in arrears under the new owner while their money sits in held funds. It’s fixable, but it confuses everyone.
Cancel or move pending bills before money moves. Council rates, strata levies and water bills that fall after settlement are the buyer’s, and BPAY bills often get a new reference number. Download any attachments before you cancel, because cancelling can remove them.
Never cancel a rent receipt to stop the seller being paid. It takes the money off the ledger but leaves it in the bank, and your reconciliation goes out by that amount the next day. Leave the receipt where it is and move the money with a journal or through held funds.
The bond follows the property
In NSW the bond is lodged with Fair Trading, so a sale doesn’t move any bond money through your trust account. The bond stays held against the tenancy. What changes is the landlord on the bond record. Rental Bonds Online lets you change the owner name on a held bond, and if the buyer is using a different agent, that agent has to accept the bond before the change completes.
Get this done close to settlement. If the bond record still shows the seller when the tenant eventually leaves, the claim process gets harder than it needs to be. Our article on Smart Rental Bonds covers how bonds that move between tenancies fit in.
In states where the agency holds bonds in trust, the bond has to be transferred to the buyer’s ledger or paid to the buyer’s agent. Check your state’s rules before it leaves the account.
If you’re losing the management
Sometimes the buyer has their own agent, or self-manages. Then you need a clean exit:
- Stop the rent at settlement. Enter the end of the management, or the vacate in Property Tree, so your software doesn’t invoice rent for a period you no longer manage.
- Pass on rent received after settlement. A tenant who keeps paying you after settlement is paying the buyer’s money. Hold it, confirm the buyer’s bank details by phone, and pay it over with a clear description.
- Give the incoming agent what they need. That means the tenant ledger with the paid-to date, the bond details and any outstanding maintenance or invoices.
- Archive with the right reason. Mark the property as lost to a sale, so your gained and lost reporting stays honest.
Close the seller’s folio properly
The seller is the person most likely to come back months later. Their final statement and their end of financial year summary are what they’ll check.
- Run a final disbursement so they get a closing statement for everything up to settlement.
- Check for pending fees on the folio, so any final payout matches what they expected.
- Remember sellers usually lose owner portal access when the property changes hands. Anything issued after settlement, such as a late recovery from the tenant, only reaches them by email.
- Expect a part-year end of financial year statement. If it shows more than the statements they’ve seen, it’s usually a post-settlement item, not an error.
Where we can help
Sales of tenanted properties are routine, but each one touches the rent ledger, two owner folios, the bond and the reconciliation in the same week. That’s a lot of moving parts for a busy property manager. We handle changes of ownership as part of our trust accounting service, across PropertyMe, Property Tree and the other main platforms. If you’d like us to look at a sale that has already gone sideways, or set up a settlement checklist for your office, get in touch.
Sources: Landlord ending a tenancy (NSW Government). Minimum notice periods for ending a residential tenancy (NSW Government, updated 19 May 2025). Rental Bonds Online help: manage online bonds (NSW Fair Trading). NSW Fair Trading Property Industry Update, October 2026. Notice periods current as at October 2026. This article is general information for agencies, not legal advice.