Does a Tenant have rights when the owner sells their property?

According to a Fitzanne Estates agent, they receive queries regarding a tenant’s position where the owner of the leased premises sells the property, mostly from tenants indicating that they were simply told to vacate before transfer.
He noted that “the point of departure is however that in our law, a tenant is protected by the common law ‘huur gaat voor koop’ maxim. This means that the lease agreement will survive the sale and the new owner will effectively step into the shoes of and become the landlord on the same terms and conditions.”
He added, “The new owner will also be responsible to refund the tenant’s deposit, minus any claim for damages that may exist. The Consumer Protection Act may also have an impact on the rights of the landlord and tenant and it is advisable to consult with an attorney when concluding the lease.”
In terms of the legal principle ‘huur gaan voort koop’, the lease precedes the sale and the tenant is entitled to retain occupation of the property for the remainder of the lease period. The South African law states that a landlord is not prohibited from selling the property to a third party while the property is housing a tenant and a lease agreement is in place.
While a tenant can stay on the property for the duration of the lease, many occupants may feel uncertain when dealing with a different landlord or the renewal terms of the lease with the new owner.
The property agent noted that sometimes in these situations tenants might want to find other accommodation. However, a tenant’s right to cancel their lease will be determined by the lease agreement that they signed and the law.
He noted, “reading the lease agreement is the first step when it comes to knowing where you stand regarding your rights and obligations should the property you live on is sold.
Some leases may specify that the tenant has the option to cancel their current lease and find another place to stay if the property is placed on the market. If these are the terms and there is mutual consent, then the tenant is absolved from any penalties that may arise due to breaking the agreement.”
The lease will remain in effect under the new landlord and the tenant is obligated by law to respect the specified terms, as will the new landlord. In certain cases, the buyer will buy a property with an existing tenant with the intention of keeping that tenant.
The Consumer Protection Act (CPA) allows for the early termination of a fixed term contract within the fixed term on the condition that the new owner is a supplier who lets property in the ordinary course of his business.
Before making any decisions regarding terminating a lease prematurely, tenants should first speak to the landlord. Discussing the matter with the landlord could help alleviate concerns regarding the sale of the property.