The Port Elizabeth Express recently highlighted the plight of a single mother who bought a house for her and her son, but was unable to take occupation because the previous owners refused to vacate the premises.
This article prompted a question from a reader about the purchase of a house with tenants in residence. We asked our Home Page experts to explain what prospective property owners should watch out for when tenants are involved.
Acoording to Property Poser’s legal experts, it is imperative for a purchaser to establish whether the property is occupied before signing a deed of sale.
Roman Dutch Law provides us with a principle known as ‘huur-gaat-voor-koop’, which means that a lease agreement takes preference over a sale agreement and has to be complied with by the seller until date of expiry. The estate agent should provide the purchaser with a copy of the lease agreement before signature of the sale agreement.
The estate agent should familiarise him or herself with the conditions in such an agreement before marketing the property. Unfortunately, this becomes more difficult when no lease agreement is in place or when there are unlawful occupants.
Deeds of sale most often stipulate that the purchaser will get vacant occupation of the property on the date of registration or another date. Thus the seller has a contractual liability to ensure vacant occupation on the stipulated date.
When this is not the case, the purchaser can be left in a difficult position. Registration of transfer is usually the date on which the risk to the property is passed to the purchaser.
The responsibility then lies with the new owner to apply for an eviction order if necessary, a time consuming and costly exercise. The new owner will, however, have recourse against the previous owner if damages in the action to him or her, can be proved.
The new owner will first have to deal with the occupants successfully in order to prove the cost he or she has incurred to evict the occupants and the damage, if any, to the property and the cost to remedy it.
The ideal solution is for the purchaser to make his offer subject to registration not taking place before vacant occupation is given to him or her. The transferring attorney will then have to ensure that registration is not effected before the tenants have vacated.
The conveyancer can also be instructed in terms of the deed of sale to retain all proceeds due to the seller until such time as the tenants have vacated and any damage to the property has been repaired. It is important to stipulate this in the agreement of sale.
Our reader also expressed concern about the trustworthiness of estate agents.
The agent should be registered with the Institute of Estate Agents Board and have obtained a Certificate of the Estate Agency Affairs Board. A reasonable knowledge of law and basic financial skills would also be helpful.
Artistic flair is another desirable attribute in an estate agent. If someone wants to add a bedroom, fireplace or bathroom, the agent should be architecturally aware. You cannot advise a client to break out a wall if a ceiling is going to collapse!
Estate agents are often asked for advice on home improvement and it is a good idea to have some knowledge of paint, flooring surfaces, landscaping, etc, and their costing.
The importance of honesty and integrity cannot be over-emphasised.
Choose a company with a good track record and the most visible advertising possible, but, most importantly, choose an agent with a good heart. After all, home is where the heart is.
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