What you need to know as a tenant when the property is sold
It’s a question we often get from our clients, the tenant has a long term lease in place and the property has been sold, now what?
The Consumer Protection Act is very clear in that the lease agreement needs to be honoured in the sale of a property.
This means that the purchaser should be made aware that there is a lease in place and understands that he/she will need to honour the lease until its conclusion unless there is some mutual agreement between both parties.
Similarly, the tenant cannot decide to leave and cancel lease and although the CPA says 20 business days notice must be given, there will likely be a cancellation fee enforced to cover costs and time to find another tenant.
The deposit needs to be passed on from Seller to Purchaser and deposited into interest bearing account for the full remaining term of the lease.
We recommend keeping a good channel of communication between Lessor and Lessee during the process where the property has been listed for sale to ensure both parties are aware of their rights and read through your lease agreement carefully.
Please contact us on info@kinesisproperty.co.za if you require further assistance on this or any other property related query.
12 May 2017
Author Cesar Alexandre