Yes, a landlord may place a rented property on the market and sell it before the lease expires.
However, the sale does not generally mean that the tenant must immediately move out.
In South African law, the principle of huur gaat voor koop usually applies. In simple terms, this means that the lease continues after the property is sold, and the new owner steps into the position of the previous landlord.
The tenant is generally entitled to:
Remain in the property until the lease ends, provided the lease has not been lawfully cancelled.
Continue renting on the terms agreed to in the existing lease.
Receive reasonable notice before agents or prospective buyers are brought into the property.
Have their privacy respected during the marketing and viewing process.
Follow a lawful process if the lease is to be terminated. A tenant may not simply be removed because the property has been sold.
The wording of the lease remains important. Sellers should review any notice, cancellation, access and sale-related clauses before putting a tenanted property on the market. The sale agreement should also properly disclose and address the existing tenancy.
Are you planning to sell a property that currently has tenants?
Discuss the lease and the tenant’s rights with the property law and conveyancing team at Bothas Incorporated before signing a sale agreement.
Good legal guidance at the beginning can help prevent delays, misunderstandings and disputes later.
Call us on 035 792 2011 to set up a consultation.