Huur gaat voor koop still defies the tenant's position when a house is sold
Huur gaat voor koop still defies the tenant's position when a house is sold.
The Roman Dutch laws which still determine how property dealings in South Africa are conducted have over the years proved themselves to be fair and equitable, says Rowan Alexander, Director of Alexander Swart Property, and this is especially true of the long standing principle “ Huur Gaat Voor Koop”.
“The basic premise behind this legal principle,” says Alexander, “is that the lease (and the tenant’s rights) take precedence over sale or other agreements relating to the property. When the house is sold, the existing lease remains in place – and there is no way the new owner can subvert it.”
This, says Alexander, is particularly relevant should the new owner wish to evict the tenant to take possession of the home. He cannot do this until the lease expires and the tenant has been informed, with due notice, that the landlord is not in a position to renew it. If the lease has a stated legal option to renew, this too remains valid.
This principle , says Alexander, also applies if and when the new owner believes he has the right to raise the rent. Not only can he not do this until the current lease expires but, should the tenant have an option to renew, any clauses stipulating the amount of the rental increases must be honoured.
Quite often, says Alexander, the buyer has not seen a copy of the lease agreement and is shocked to find that for several months he has no power to make any changes. A good estate agent, therefore, he says, will always not only give a copy of the lease to the new buyer (and make him sign for it) but go through it with him to ensure that he understands all its points.
In a few cases, says Alexander, leases (unlike sale agreements which have to be in writing) have been made verbally. When this happens the situation can be particularly tricky.
“To recap therefore,” says Alexander, “the estate agent should make absolutely certain that the new buyer:
· has a copy of the lease (if it is in writing). If it is not in writing he should clarify its terms with the buyer.
The agent should in addition ensure that the buyer:
· knows when the lease expires; and
· whether the lease has an option to renew, and
· what the rental is and what agreements have been made regarding an increase if the tenant is allowed to stay on at the expiry of a current lease.
The agent should also ascertain for the buyer:
· whether the landlord has a deposit from the tenant. If he has it must go to the new owner.
· what fixtures in the property belong to the tenant and can legally be removed by him when he leaves.
“It will be clear therefore,” says Alexander, “that when a home is sold with a tenant in occupation great care has to be taken to clarify the new owner’s rights. This is especially pertinent currently because many buy-to-let investors are on the look out for already tenanted properties.”
07 Feb 2018
Author Independent Author