What Rights Does the Tenant Have When a Landlord is Selling a Property?

According to South African legislation, a landlord may sell their property at any time.

Often tenants are left feeling uncertain about how this will affect them, can they stay, or do they have to leave the property? 

Nonetheless, certain rights and obligations remain in place for both landlords and tenants. 

As a landlord, it is important to address tenants’ concerns and answer questions that they may have. Not only is this the right thing to do, but also ensures that the process proceeds smoothly without unnecessary conflict. 

Selling a Property With a Tenant: What Happens With The Lease Agreement

The general rule is that a lease agreement takes preference over a sale. Although this cannot stop you as an owner from selling your property, it does mean that if a lease was in place before the property was sold, the tenant is entitled to stay. 

However, the duration of how long they are allowed to occupy the rental will vary depending on the type of lease agreement that is in place.

Fixed Term Lease

If a fixed-term lease is in place, the Consumer Protection Act (CPA) states that a tenant may choose to terminate the lease agreement by giving 20 business days’ notice. This is unfortunately not the case for landlords. 

Unless the title transfer coincides with the date of the lease’s termination, the reality is that the buyer has to take over the lease. A new buyer may have to accept that the home will come with a tenant. 

It might be worthwhile for potential buyers to read the lease agreement before making an offer on a house.

The Consumer Protection Act (CPA) also stipulates that landlords have to give tenants proper notice, generally, this is between 40 and 80 business days before the date of termination. 

Month to Month Lease 

Month-to-month leases require a landlord to give a tenant proper notice of one full calendar month starting before the first day of the month unless the lease contract stipulates otherwise. 

Other Important Factors to Consider

Apart from the information already mentioned in this article, there are a few other things that you need to know, whether you are a landlord or prospective buyer.

It is crucial to see if the lease agreement makes provision for: 

Option To Renew 

The Option to Renew is the unilateral right of a tenant to renew a lease. Similarly, this right can only be waived by the tenant. 

If the property is sold, the new owner will be bound to this.  

Right to First Refusal 

The Right to Refusal refers to the obligation of a landlord to offer a property to a tenant first, before they may commit to other offers. 

Vacant Occupation on Transfer

If the sale agreement stipulates Vacant Occupation on Transfer, you have to check that you have given proper notice to your tenant. 

Evicting a Tenant 

If a tenant refuses to move out after their lease expires, or by the time the date of transfer is concluded, you will, unfortunately, have to start eviction proceedings. 

Although the process of eviction can be time-consuming, expensive, and frustrating to say the least, having expert legal counsel can make all the difference in getting the result that you need.

If you want more information about evictions in South Africa, you might find our article on the topic helpful. 

Alan Levy Attorneys & Conveyancers: Experts in Property Law and Conveyancing 

Alan Levy Attorneys offers landlords expert advice and legal guidance on landlord/tenant law in line with South African legislation. 

Remember, this article is a summary only and does not constitute legal advice, of any sort. For legal advise on how to handle your matter, please contact Alan Levy Attorneys.

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