Your landlord sold the property that you are currently renting, what now? In this typical situation the lease agreement between the tenant and landlord will take precedence over the sale and the clause “huur gaat voor koop” will be in force. What this clause entails is that the lease takes precedence over the sale of the property and the tenant has the right to remain in the property for the full duration of the lease agreement. This clause aims to protect the most important element of the lease agreement, specifically the tenant paying rent to the landlord, in return for an undisturbed occupation of the property for the duration of the lease agreement.
The tenant and the new owner are now bound by the lease agreement conditions until it is renegotiated or terminated. Often one of the requirements are that the tenant pays a deposit before moving into the property, in this scenario the deposit held by the previous landlord must be transferred to the new owner, the same rule would apply as with the previous landlord, the deposit would have to be held in an interest bearing account in favour of the tenant to be refunded to the tenant with interest when he moves out.
However should the tenant decide to cancel the lease agreement, he may incur a penalty as the conditions of the lease could prevent the tenant from leaving the new landlord in the lurch. In terms of the Consumer Protection Act the tenant may cancel the agreement if the landlord is a supplier according to the Act and lets property as an ordinary course of business. The tenant will have to give the landlord 20 business days’ notice of the termination however there is still a “sensible” penalty that the landlord may charge the tenant.
The penalty that may be charged to the tenant is the cost of finding someone else to rent the property as well as one month’s rent as this may be how long it might take to find a new tenant. However should the landlord cancel the agreement, the landlord would have to give the tenant one month’s notice to find a new place.
The tenant may have an option to purchase the property that they are currently renting, however this does not fall within the “huur gaat voor koop” clause, the tenant will have to exercise his option against the seller who granted him that option rather than the purchaser. If the purchaser knew of the tenant’s option to purchase the property but still went ahead with purchasing the property after the tenant had exercised his option, then the tenant will be entitled to claim transfer of the property from the purchaser. It is the purchaser’s duty to ensure that they are aware of the contents of the lease agreement as ignorance by them will not be a valid excuse. With that being said the seller also has a duty to inform the purchaser that there are currently tenants leasing the property and they will have the right to occupy the property for the duration of the lease agreement.
This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice.