Huur Gaat Voor Koop – the tenant’s right to stay put
What rights does a landlord have when cancelling a lease, even if the tenant has not been in breach?
Rental property law expert and director at Marlon Shevelew and Associates Inc, discusses a clause that covers this issue.
The landlord may cancel this lease on 2 (two) months’ written notice on the following conditions:
- the landlord intends to move into the premises; or
- the landlord intends to sell the premises.
What is Huur Gaat Voor Koop?
In simple terms, it means that a tenant, who has a lease, is protected, even if the property is sold to another person. The sale does not impact on the rights of the tenant to continue its lease until its expiration date.
The exception to this is that of a sale in execution by a bank (this is when the bank sells the property because the owner does not pay his bond).
If a purchaser at the sale in execution makes an offer to buy this property, for a price which is less than what the bank requires, the property may be sold without the lease. This is the exception to Huur Gaat Voor Koop.
My view is that the exception to Huur Gaat Voor Koop must not simply be confined to sales in execution.
In our law, one may always curtail one’s common law (rights which are created by case law) rights by way of a contractual agreement unless such an agreement is contra bonis mores (against good morals).
I can see no reason why a clause that entitles a landlord, on reasonable notice, to cancel a lease with a tenant – even if the tenant was not in breach, to be against good morals.
In fact I think it would be difficult for a tenant to argue same after having initially agreed to the clause in the lease.
There is also no harm in inserting such a clause as the landlord will only be gaining extra rights and if the clause is successfully challenged, the landlord will be in no better or worse position than he
would be had he not inserted the clause in the first place.
In this case of a lease with my clause mentioned above, the landlord would, in accordance with his contractual right, be able to terminate the lease agreement, prior to the sale of the property.
As such there would be no rights and/or obligations that would be passed onto the new owner.
This would of course be different if the sale of the property and passing of rights took place before the landlord cancelled the lease in accordance with the cancellation clause.
The only concern that I have is that the Consumer Protection Act recognises that an injustice may be done to a tenant in such a situation – after all, a tenant that pays and does not breach should not simply have his lease terminated, should he?
I think one must accept that if a lease agreement is cancelled by the landlord, the tenant may suffer ancillary damages such as movers’ costs and any costs pertaining to the conclusion of a new lease.
Perhaps the clause should seek to prevent such an argument by stating that, in the event of the landlord cancelling the agreement in accordance with the cancellation clause, that he will be
liable to pay the tenant a reasonable cancellation fee and specify that amount which the tenant should specifically agree to a reasonable amount.
I would also ensure that this clause is highlighted and that the tenant’s attention is drawn thereto specifically, and perhaps leave space for an initial of the tenant next to the clause itself.
The lease should also contain a clause that should state that each clause is severable and the remainder thereof will continue to exist and be binding in the event that any clause is held to be otherwise.
Who is Marlon Shevelew?
Marlon Shevelew is the director of Marlon Shevelew and Associates Inc., a Cape Town-based law firm specialising in rental property, contractual, consumer and company law. Marlon is the previous author of the TPN Residential Leasepack, the current author of PayProp’s rental documentation and preferred attorney to PayProp, IEASA South Africa, the Rental Housing Tribunal Western Cape, presenter of the Advanced Residential Property Law Seminar endorsed by the University of Cape Town and the director of the top rental property law firm in the country, according to several international publications. Marlon also created the unique Rental Retainer Club and RentDoc which offers clients affordable legal fees for rental property-related matters.