The Roman maxim “huur gaat voor koop” forms an integral part of property law in
South Africa and has important implications for both landlords and tenants,
particularly given that it applies to both individuals and juristic entities.
The premise behind the maxim is that
those rights which vest first should trump those rights which vest later in
time. In the case of a landlord/tenant relationship, this means that where a landlord
sells a property that is the subject of a lease agreement, the tenant’s rights
are protected and the purchaser of the property may not cancel the existing
lease agreement or evict the tenant. Essentially, therefore, the purchaser
“steps into the shoes” of the seller and will be bound by all of the material
terms of the lease agreement.
The word “material” is of great
importance. The purchaser will only be bound by those terms which directly
govern the relationship between the tenant and the landlord. Ancillary terms,
such as a right of first refusal in the event that the landlord wants to sell
the property, will not bind the new owner of the property. Furthermore, given
that the maxim is only intended to protect the tenant’s rights, it will not
come to the aid of Property Practitioners. In the event that the new owner of the property no
longer wishes to make use of the services of a managing property practitioner or pay Property Practitioner’s
commission, he will be perfectly within his rights to cancel the Property Practitioner’s
mandate.
The maxim will automatically apply in
the event that a property is sold, unless the lease agreement specifically
stipulates that it will not apply. In such an instance, the provisions of the
lease agreement will trump the common law, and the lease agreement can be
cancelled if the property is sold, provided that the tenant is given a
reasonable notice period. The maxim will also not apply to properties that are
sold in execution, as in such an instance the rights of the bank will trump
those of the tenant.
Insofar as rental is concerned, the
rental will only be payable to the purchaser once transfer has been affected
and the title deed has been registered in the name of the purchaser. The
purchaser’s rights only start running from this point and, as such, the
purchaser will not be able to claim any arrear rental from the tenant.
Similarly, it is only at this point that the tenant’s deposit must be transferred
into the account of the purchaser.
It is important that landlords and
tenants are fully aware of their common law rights from the outset, so as to
avoid any misunderstandings and disputes arising during the subsistence of the
lease agreement.