Vacant possession and tenanted property

One of the most consequential things a contract of sale tells you is whether you can actually move into the property when it settles. A property sold with vacant possession will be empty at settlement, so you're free to move in or re-let it. A property sold subject to an existing lease comes with a tenant who stays on and keeps paying rent to you — which means you can't move in until that tenancy lawfully ends. This guide explains the difference, what "vacant possession" does and doesn't guarantee, and how the rules shift depending on the state you're buying in.

Key takeaways

• The contract decides which applies: vacant possession (empty at settlement) or subject to lease (tenant stays on) is set by the contract, not assumed.
• Subject to lease binds you to the tenancy: all the existing tenancy terms apply to you from settlement, so review the tenancy agreement before you commit.
• Vacant possession isn't a cleaning guarantee: it means no one is living inside — not that the property is cleared of debris or professionally cleaned.
• Tenancy law is state-based: Queensland adds specific protections and disclosure rules that don't apply the same way elsewhere.

1. The two ways a property can be sold

The distinction comes down to who — if anyone — is occupying the property at settlement. Sold with vacant possession means no tenant or other party will be occupying the premises once settlement completes, leaving you free to move in or rent it out. Sold subject to lease means an existing tenant remains after settlement and continues paying rent to you as the new owner; you cannot move in until the tenancy period ends or is lawfully terminated, and all the terms of that tenancy bind you from the settlement date onward. Which applies is set by the contract — so if you're buying a tenanted property but intend to live in it, that needs to be negotiated with the seller before you sign. The full explanation is in the vacant possession and tenanted property explainer.

2. What vacant possession does — and doesn't — mean

Vacant possession is a narrower promise than many buyers expect. It means no one is living inside the property at settlement. It does not necessarily mean the property has been cleared of all debris or left in a clean state. If you need the property professionally cleaned or cleared by settlement, that has to be negotiated as an additional special condition and paid for by the seller before you sign — it won't happen automatically just because the sale is "with vacant possession." Building that expectation into the contract up front is far easier than trying to enforce it afterward.

3. How the rules differ by state

Beyond the core choice between a property sold with vacant possession and one sold subject to lease, tenancy law is set by each state, so disclosure duties, rent rules and the seller's obligations after the contract date vary. Queensland in particular layers on extra disclosure, rent-timing and seller-conduct protections that don't apply the same way elsewhere.

No New South Wales content is available yet. For the specifics, read the Queensland or Victoria explainer.

4. What to watch when buying a tenanted property

• You inherit the lease as-is: the rent, the term and all the tenancy conditions bind you from settlement — review the tenancy agreement documentation before you commit.
• Past and informal tenancies (QLD): even an informal arrangement with below-market rent in the past 12 months can limit the rent you're able to charge.
• Rent-increase timing (QLD): because rent can rise only once a year across ownership changes, when the last increase happened affects when you can raise it.
• Moving-in plans: if you want vacant possession on a tenanted property, negotiate whether and when it can be given before you sign — otherwise you won't be entitled to it at settlement.
• Cleaning and clearing: if you need the property clean at settlement, add it as a special condition rather than assuming vacant possession covers it.

5. Questions to ask before you sign

• Is the property sold with vacant possession or subject to an existing lease?
• If it's tenanted, can I see the full tenancy agreement and confirm the rent and term?
• Have all past tenancies — including any informal ones — been disclosed?
• When was rent last increased, and when could I next increase it?
• If I want to move in, can vacant possession be negotiated, and by when?
• Do I need a special condition for cleaning or clearing the property by settlement?