New owner must adhere to lease agreement

Our panel has received a lengthy e-mail from a lady who has been renting a property, which has now changed hands, for the past four years.

The agreement stipulates an initial lease period of one year. It further states that the lease will be extended indefinitely after expiration of the first year, unless either party gives the other two months’ prior notice that the lease shall terminate after the initial one-year period.

Another stipulation is that the tenant should get two months’ written notice of any change to the rental amount.

Our reader says the new owner has now increased the rental by R1 000 with immediate effect.

She wants to know whether this is within his rights and if the two-month notice period relating to a rental increase is still in effect. She also asks whether she is entitled to interest on her deposit should she cancel the lease and at what rate.

Lucille Geldenhuys from Lucille Geldenhuys Attorneys in Stellenbosch says it is possible for a property owner to sell the property during the lease period. “In that case, the common law concept of huur gaat voor koop will be applicable.”

She says this concept refers to when a property is sold to a purchaser subject to a lease and the tenant occupies the property. “The tenant is legally entitled to remain in the property despite the property having been sold.”

In other words, says Geldenhuys, the new owner may not evict the tenant or cancel the lease, provided the tenant adheres to its terms and conditions.

“The lease remains valid and binding until the legal termination thereof, either in terms of the lease itself, by mutual consent or by way of legal process.”

Geldenhuys says if the agreement stipulates that the tenant must pay a deposit to the lessor prior to the commencement of the lease, the lessor, as seller of the property, must transfer the deposit plus accrued interest to the purchaser once ownership of the property has been transferred.

“In terms of the Rental Housing Act, the purchaser must continue to hold the deposit in an interest bearing account until the lease is terminated.”

Schalk van der Merwe from Rawson Properties Helderberg says the seller must also provide the purchaser with the inventory of the property that was drawn up between him/her and the tenant during their joint inspection at the commencement of the lease.

“This will enable the purchaser to know which faults and defects existed in the property at the start of the lease and whether the tenant is liable for any repairs.”

Van der Merwe notes, in the reader’s situation, that the initial fixed rental period of one year has already expired.

“Either party therefore has the right to terminate it at any time with two months’ written notice. It is therefore possible for the new owner to terminate our reader’s lease.”

Furthermore, says Van der Merwe, the initial lease stipulates that once the fixed period has expired and the lease continues indefinitely, the lessor shall have the right to increase the rental with two months’ written notice to the tenant.

“If the reader is not happy with the increased rental, she may terminate the lease with two months’ written notice to the new owner.”

Van der Merwe says upon termination, and after she and the new owner have finalised the joint inspection and it is confirmed that she is not liable for any repairs, the initial deposit plus accrued interest must be refunded to the reader.

Send your property related questions to coetzee[at]fullstopcom.com.

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