Sunday, September 10, 2017

Can Huur Gaat Voor Koop be contracted out of?

Question: can Huur Gaat Voor Koop be contracted out of and ordinary eviction processes thus not followed?

My Answer:

Huur Gaat Voor Koop is a real right of the lessee, not a contractual or personal right.

Where a sale of property has occurred, by means of registration of the property in the new owner's name, at the requisite territorial Deeds office, the lease has been transferred to the new owners of the property. If they want to evict, they have to follow the normal processes to do so. The same lease as was had with the old owner is had with the new owner. Neither the tenant nor the landlord can elect whether to uphold it. Rent is due to the new owner and use and enjoyment to the tenant, assuming in a short lease, there has been occupation of the property, and in a long lease, it has been registered.

The question dealt with a matter where the new owner then purported to make an oral agreement of lease with the tenant, already in occupation of the property. Oral and even tacit agreements of lease are valid in South African law. However, if the old lease set out a non-variation clause, it needs to be complied with, as the material terms of the lease between the old owner and tenant are now applicable to the new owner and tenant.

Huur Gaat Voor Koop applies automatically in terms of law. The lease is between tenant and owner for the use and enjoyment of the property. If the owner changes, the new owner becomes the lessor. Huur Gaat Voor Koop means that the contract of lease is between the owner, whoever the owner is, and the lessee. It is a concept that the new owner steps into the shoes of the old owner. It is a basic concept of law and to my knowledge cannot be contracted out of. The same lease as was had with the old owner is had with the new owner. Neither the tenant nor the landlord can elect whether to uphold it. Rent is due to the new owner and use and enjoyment to the tenant, assuming in a short lease, there has been occupation of the property, and in a long lease, it has been registered. There is of course, the decision of the court that an option to purchase of the lessee's, in the contract of lease, is not material to the lease itself, and thus does not transfer to the new owner. Generally speaking, there is however merely a stepping into the shoes of, at work.

In an example given in the actual question, a contract allows for a landlord to give a short notice to the tenant, to cancel the lease and evict them upon sale of the property by the landlord. For me that creates a problem of a term of the contract being variable and at the sole discretion of the party it benefits. I think it unlikely that term will be deemed valid. This is different from normal notice periods in hybrid leases.

If the person asking were evicting the tenant, firstly they should make sure they are representing the current registered owner. Secondly, they should not rely on such a clause. The clause is likely contra bonos mores, and void for vagueness, as essentially, a term of the contract is determined solely by one of the parties at a later stage. The lease purports to be a fixed term lease, but is contingent on an event entirely in the landlord's discretion, seemingly aimed at negating the tenant's real rights in relation to the property. This is not the equivalent of ordinary notice periods in a contract, but rather affects a material term, via vagueness. The landlord needs to follow the standard process of eviction. They shouldn't rely on that term, as it may be deemed unenforceable at law. In the case of a residential lease, the Consumer Protection Act, and Rental Housing Act will also play a role, as well as provisions such as those in the Prevention of Illegal Eviction of Unlawful Occupiers Act, and possibly the remedy for Spoliation.

An attorney dealing with such a matter would need to look into the ordinary notices the landlord would need to give and what normal time periods apply. A good start would be to check the copies of Amlers and Butterworths at their law firm. Before proceeding in such a matter it can be advisable to look at the titles for eviction, lease, vindication and the Actio ad exhibendum, in Amlers, along with its title on Spoliation.

Nothing in this post should be relied upon as legal advice. For that, kindly make an appointment with an attorney and brief them fully of your matter.

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