­Avoid Costly Tenant Disputes: What You Must Know About The Vacant Occupation Clause

By Sarah Nordien | Associate Director

The vacant occupation clause in a deed of sale may seem straightforward, however, misunderstanding the clause can lead to costly disputes and delays. Here is what you need to know before making an offer on a property:

It is an essential clause which should be considered carefully by both Buyer and Seller

The purpose of the clause is to ensure that the buyer receives the property free of any occupants. Where the buyer wishes to purchase the land with existing tenants, this should be expressly stated to prevent any unexpected legal battles. Without this clause, each party could also put the other “to terms” (enforce the contract) where there is an existing tenant that is refusing to leave.

The tenant’s rights come first – “Huur gaat voor koop”

In South African property law, the principle of “huur gaat voor koop” (lease trumps sale) means that an existing tenant’s rights are protected, even after the property is sold. This means a Buyer cannot simply demand that the tenant vacate, it depends on the lease agreement in place. If a lease is still valid, the Buyer steps into the shoes of the previous landlord and must honour the lease agreement.

When a tenant refuses to leave, the Law is required to be followed (The PIE Act)

If a tenant is reluctant to vacate the premises and there is no valid lease in place, the Seller or Buyer cannot force the tenants to vacate without following due process. The Prevention of Illegal Eviction from and Unlawful Occupation of Land Act (PIE Act)  governs evictions in South Africa, requiring a legal eviction process through the courts.

Misunderstanding the vacant occupation clause can lead to unexpected legal battles and delays in your property transaction. Before making an offer, ensure you understand your rights and obligations.

Need clarity on tenant rights and property sales? Contact us today to avoid costly pitfalls and ensure a smooth transaction.