What are my rights as a tenant when the property is being sold?

If my landlord decides to sell her property, what are my rights as a tenant? Can I remain on the property? Am I allowed to cancel the contract? Would canceling the contract be a breach? South African law does make provision for this type of situation. It is still important, however, to consider your contract as well.

My rights as a tenant: Can I remain on the property?

South African law does not prevent a landlord from selling her rental property to a third party even while the property is occupied by you, the tenant, who is living on that property under a lease agreement. However, the legal principle of huur gaat voor koop also applies in this situation – the lease precedes the sale. This means that you are within your rights to remain living on the property for the remainder of the lease period. This principle protects you from eviction while your lease still stands. The purchaser can be seen as stepping into the shoes of the landlord. The lease automatically transfers to the new owner, with all the conditions in the contract remaining the same.

My rights as a tenant: Can I cancel the agreement?

While huur gaat voor koop allows you as a tenant to remain on the property for the remainder of your lease, sometimes circumstances may make this undesirable. You might feel uncomfortable about the idea of dealing with a different landlord. You might feel uncertain about the renewal terms of the lease with the new owner. There is also the possibility of the new owner wanting to move into the property and not rent it out. You might find yourself wanting to cancel your lease. The question is, can you cancel your lease without breaching the contract and incurring a penalty? Whether you can will depend on the law and your lease agreement.

Your first port of call should be to read through your lease agreement. Understand your obligations and rights as a tenant. Does your contract include a sales provision that covers this very situation? A sales provision might give you the right to cancel your contract if the property is placed on the market. If there is a term in your contract to this effect and there is mutual consent, you should be allowed to cancel your contract without breaching it and incurring a penalty. Just be sure to consider how the provision is written and act accordingly.

If there is no sales provision in your contract, then the agreement transfers from original landlord to new property owner, terms, conditions and all. In this case, it will be much harder to get out of your lease agreement without facing a penalty fee. As the tenant, you will be obligated by law to respect the agreement. The same applies to the new property owner.

Some lease agreements will fall under the application of the Consumer Protection Act (CPA). The CPA gives you various rights as a tenant. Regarding whether you can cancel your contract when it falls under the operation of the CPA, we have written a post about that here.

Communicate!

Before you make any decisions about cancelling your lease, we strongly recommend communication. Communicate with your property owner, you might find that your concerns could be resolved. Allow for a dialogue so that you can avoid any difficult and potentially costly future situations.

If you require assistance regarding any matters regarding your rights as a tenant, please do not hesitate to contact us at info@gunstons.com.

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