Hi There,

I recently sold a domestic property that was rented out to some tenants. A rental agency drew up the original contract and there are clauses to the effect that the rental contract will transfer to the new owner. I understand that this is standard practice and am happy with the clauses.

The tenants gave the rental agency notice that they will vacate the property on the 31st of July 2019. One month prior to the contract end date of 31 August 2019.

Transfer of the property happened on the 8th of July 2019. The transferring attorneys were also informed of the tenants giving notice and that they would vacate the property on the 31st of July 2019. The transferring attorneys payed over a pro-rata rental amount for the month of July to the purchaser of the property since the tenants had already paid me rental for the month of July 2019.

The new owner of the property was not informed of the tenants giving notice that they would vacate the property 1 month early. The new owner is querying if she is due rental income for the month of August 2019.

I would like to understand if there is any basis to this query and if the new owner would be due rental income for the month of August 2019. If the new owner is due rental income for the month of August 2019 I would also like to understand who would be liable to pay this rental income.

If you need any more information please let me know.

Kind Regards,

Eric

Hi there and thank you for your question,  

I am a practicing attorney based in South Africa and I will assist you with your question. Please feel free to ask as many follow up questions in order to clarify your question. If you have a new question, you must please open a new thread.  

Yes, in terms of the "huur gaat voor koop" legal doctrine, the purchaser will take over the lease from you and the tenant's rights to the lease agreement will continue, just as with the previous owner. 

Well, the tenants are legally entitled to cancel the lease agreement, for whatever reason under the sun, in terms of the consumer protection act, by giving 20 business days' notice. That means that the tenants are legally and lawfully allowed to cancel the lease agreement, and move out, before 31 August. 

BUT, the owner of the property (I'm probably now talking about the purchaser) will have a damages claim against the tenant for a "reasonable cancellation penalty". Typically, that penalty amounts to about 2 months' rental, but if the tenant only cancelled the lease agreement 1 month early, the "reasonable cancellation penalty" will most certainly only be limited to the 1 month.

The purchaser will unfortunately need to engage with the tenant (ex-tenant) and sue them him the "reasonable cancellation penalty".

In my view, the new owner wouldn't be entitled to "rental", but would be entitled to claim the "reasonable cancellation penalty". The "reasonable cancellation penalty" would only be claimable from the tenant. 

The seller of the property CAN'T be held liable for the actions of the tenant if the seller has sold, and transferred, the property to the purchaser. 

If there is a part of the answer which you need more advice on, or clarity please continue in this same thread instead of opening a new question.

Att. Patrick

Please remember this is a dialog if you have follow up questions please use the REPLY button and ask. If I did not answer the question you thought you were asking, please respond with the specific question you wanted answered. I hope you found my answer helpful, and you have finished asking your questions, please click on the GREEN ACCEPT button in order to mark the question as closed.