Cape Town – When buying a property that has an existing tenant, new owners should make sure they are fully aware of the tenant’s contract, according to a property law expert.
Fin24 user Natasja Jacobs bought a property recently and was hoping to move in; however, the property came with a tenant, who had legal rights to remain in the house.
“The agent stated that the lease agreement was indefinite, so I assumed it was month-to-month or flexible,” said Jacobs. “My offer to purchase states that I am able to take occupation upon registration.”
After her home loan was approved, the estate agent said the lease was until 28 February 2015. “This is where 'lease before sale' comes into effect,” she said. “The lease agreement also states that I can give two months’ notice, but not before 1 January 2015.”
“I purchased a property to live in and now I have to rent another property until the lease agreement expires, which I think is very unfair, as the property is in my name, yet I cannot take occupation,” she said. “The lawyer also stated that I may not move into the property. I cannot understand how such a law can be in place as I am out of pocket with this whole transaction.
“Is there any legal way to cancel this lease agreement with this tenant?”
Not really, says expert
Denoon Sampson, from Denoon Sampson and Ndlovu Conveyancing Attorneys, said the legal principle “Huur Gaat Voor Koop” governs the position as the new landowner.
“Essentially, this means that the new owner steps into the shoes of the previous owner, as far as existing lease agreements are concerned,” said Sampson.
“Accordingly, the right of the existing tenant to occupation takes preference over that of the new owner, provided the existing lease agreement is valid. It seems as though you did not have sight of the existing lease agreement before you purchased.
“A further legal principle is that you are expected to accept responsibility and be liable for signing contracts when you signed, particularly if you were aware of those existing arrangements and proposals,” said Sampson.
“So, therefore, as a broad principle, you are committed to observing the validity of the existing lease agreement,” said Sampson. “Similarly, the tenant is entitled to rely on and expect that the lease agreement will protect him and guarantee his tenancy.”
“The other side of the fairness coin would be that it would be unfair if the tenant was forced to vacate, when he thought that the lease agreement protected his rights.
“To give an exacting answer to this problem, one would have to scrutinise the wording and drafting of the lease agreement to determine if it is ambiguous and/or potentially invalid. As a last resort, one may consider persuading and/or paying the existing tenant to vacate earlier than he planned to.
“It may be cheaper, than having to occupy alternative accommodation, pending the expiry of the lease agreement.”
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