Your rights when your landlord sells

One of the downsides of renting a home is that you’re not lord of the manor. Landlords have the authority to make changes with or without your consent, and this includes selling a home while you are in tenancy.  

This situation can be daunting and inconvenient, particularly if you have to find a new place on short notice and move earlier than you expected. However, you do have rights. Your tenancy agreement still remains in place and can only be terminated in accordance with due process.

Study the contract

It’s crucial to go through your lease agreement with the landlord or agency, says Adrian Goslett, regional director and CEO of RE/MAX of Southern Africa.

“In terms of the legal principle, the lease agreement precedes the sale. As a result, the tenant is within their right to retain occupation of the property for the remainder of the agreed lease period.”  

If, however, there is a clause for early termination of your lease, you may be obliged to move. This is why it’s so important to be armed with information before you sign your lease, and to know your rights and obligations.  

What are my rights?

If agreed at the signing of the lease, there may be a stipulation giving a tenant the right to cancel their contract should the property be placed on the market, Goslett says. In this instance, the tenant is absolved from any penalties that may otherwise have arisen due to breach of agreement.

If no such stipulation exists, all terms and conditions in the lease before the sale of the property will be carried over to the new owner. This means it’s far more difficult to get out of the agreement, and the tenant may face a penalty if they are in breach. Further, both tenant and landlord will be obliged by law to respect the stipulated terms.

“It’s possible for a buyer to purchase a rental property with the intention of retaining the tenant,” Goslett says. “If this is the case, they will likely be unwilling to release the tenant from their contractual obligations.”

There is a loophole, however. In terms of the Consumer Protection Act (CPA), a fixed-term contract can be terminated early on the condition that the new owner is a supplier who lets the property in the ordinary course of his or her business.

This is regulated by section 14 of the act. In these situations, a tenant is able to give 20 business days’ notice during the term of the lease. However, they would then be liable for the notice month and possibly a reasonable penalty fee.

Goslett says that section 14 will not be applicable if the parties to a lease agreement are both juristic persons. 

“Ideally, before the tenant makes any decisions about cancelling their lease agreement, they should first communicate with the landlord. Discussing the matter could help put certain issues to rest and there may be little or no need for concern.

“There is the possibility that the sale of the property only takes place after the period of the lease agreement has expired, or the new landlord may be better than the current one,” says Goslett.